T HE I NVESTMENT M AKEUP OF A TLANTA S M ULTIFAMILY M ARKET Joshua - - PowerPoint PPT Presentation

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T HE I NVESTMENT M AKEUP OF A TLANTA S M ULTIFAMILY M ARKET Joshua - - PowerPoint PPT Presentation

Mar 28, 2024 47 likes •228 views

T HE I NVESTMENT M AKEUP OF A TLANTA S M ULTIFAMILY M ARKET Joshua Goldfarb, Managing Partner The Types of Multifamily Investments RISK VS. RETURN HIG IGH HIG IGH RISK RETU RETURN RISK RN LOW LOW The Types of Multifamily

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SLIDE 1

THE INVESTMENT MAKEUP OF ATLANTA’S MULTIFAMILY MARKET

Joshua Goldfarb, Managing Partner

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SLIDE 2

The Types of Multifamily Investments

RISK VS. RETURN

LOW HIG IGH RETU RETURN RN LOW HIG IGH RISK RISK

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SLIDE 3

The Types of Multifamily Investments

Development

  • High Risk Investment due to:
  • Longest return horizon
  • Timing of construction completion
  • Cost of construction
  • Interest rate movement
  • Lease up / stabilization
  • Investment demand
  • Quality: Best
  • Location: Best
  • Condition: Best
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SLIDE 4

The Types of Multifamily Investments

Class C

  • High to Moderate Risk Investment
  • Quality: Builder Grade/ Value Engineered
  • Materials Include:
  • Vinyl Exterior
  • Asphalt Rolled Shingle Roofs
  • Builder Grade Carpet
  • Laminate Countertops
  • Pressboard Cabinets
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SLIDE 5

The Types of Multifamily Investments

Class C

  • Condition: Fair to Average
  • Vintage: 1960’s to 1980’s
  • Location: Stable to Declining
  • Largely Concentrated Areas of Class C Apartments are:
  • Surrounding Hartsfield Jackson Atlanta Int’l Airport
  • Older Industrial Areas
  • East Dekalb County
  • South Clayton County
  • Rental Rates: Soft
  • Concessions Offered
  • Based on Affordability
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SLIDE 6

The Types of Multifamily Investments

Class B

  • Moderate to Low Risk Investment
  • Quality: Good, but Older
  • Materials Include:
  • Hardiplank/ Brick
  • Architectural Grade Shingled Roofs
  • Faux Granite Countertops
  • Designer Laminate Floor
  • Condition: Second Generation/ May have

already received Major Renovation

  • Vintage: Late 1980’s to 1990’s
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SLIDE 7

The Types of Multifamily Investments

Class B

  • Location: Stable to Moderately Improving
  • After Initial Rise and Decline in an area
  • Largely Concentrated Areas of Class B are:
  • Parts of South Gwinnett County
  • Parts of West Cobb County
  • Parts of East Dekalb County
  • Rental Rates: Stable to Increasing
  • Increasing Rents largely due to Property Specific

Improvements

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SLIDE 8

The Types of Multifamily Investments

Class A

  • Low Risk Investment
  • Quality: Newest Available/ Best Grade for Industry
  • Materials Include:
  • Stacked Stone/ Hardiplank
  • Architectural Grade Shingled Roofs
  • Detailed Mouldings
  • High Ceilings
  • Granite Countertops
  • Decorative Fixtures
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SLIDE 9

The Types of Multifamily Investments

Class A

  • Condition: New
  • Vintage: 2000’s to Present
  • Location: Rapid Growth Areas
  • Largely Concentrated Areas of Class A Apartments are:
  • Buckhead
  • Midtown
  • Surrounding Emory
  • Rental Rates: Rapidly Increasing
  • Discretionary Spending
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SLIDE 10

Multifamily Investors Profiled

Risk Level of Investor Type

Sole Practitioners/ Partnerships Syndicators Institutional LOW OW HIG IGH RISK RISK

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SLIDE 11

Multifamily Investors Profiled

Sole Practitioners/ Partnerships

  • Investors Profiled as High Risk
  • Included Investors:
  • First time buyers that run the property themselves fulltime

(Limited or General Partner)

  • Side investment to someone with a career
  • Example: Physician
  • May Hire Third Party Management Company
  • Majority are Local Owners and Operators
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SLIDE 12

Multifamily Investors Profiled

Syndicators

  • Investors Profiled as Medium Risk
  • Included Investors:
  • Private Equity Funds
  • Family Officed Money
  • Exclusive Occupation
  • Local, National or International Investors
  • May Hire Third Party Management Company
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SLIDE 13

Multifamily Investors Profiled

Institutional

  • Investors Profiled as Low Risk
  • Included Investors:
  • Pension Fund
  • REIT
  • Wall Street Firms
  • National Investors
  • May Hire Third Party Management Company
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SLIDE 14

Multifamily Investors Profiled

Investor Type Most Interested in Atlanta Market:

  • Syndicators
  • Most Diverse Profile Including:
  • Israeli Investors
  • South American Investors
  • Northeast and West Coast United States Based Investors
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SLIDE 15

Multifamily Investors Profiled

Why are Syndicators Interested in Atlanta Market:

  • Atlanta Economy is in the 2nd Inning of Recovery
  • Contrary to the Raleigh, Charlotte and Nashville economies

which are believed to be in the 6th inning of recovery

  • Why?
  • No jobs in Atlanta during the recession, college graduates

moved to more livable cities like Raleigh, Charlotte & Nashville

  • Now, those graduates are moving to Atlanta because of

new jobs

  • Atlanta’s economic downturn was a larger swing than other

cities

  • Atlanta has more diversified economy and jobs
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SLIDE 16

Time Period, Value & Investor

$40,000 $50,000 $60,000 $70,000 $80,000

2010 2011 2012 2013

Average Price Per Unit

Georgia Israel Canada South America California & New York

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SLIDE 17

Value Trend Over the Last Five Years

  • Value Theory

$0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 2008 2009 2010 2011 2012 2013

Average Price Per Unit

???

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SLIDE 18

The Future of Atlanta’s Multifamily Market

  • Dependent upon Interest Rates
  • Deals are made when Expectations of both the

Buyer and Seller Meet