Mar 8, 2016 | Bendix Anderson | National Real Estate Investor
Multifamily developers can capitalize on a huge unmet need in the market by buying and renovating older class-B and class-C apartment buildings.
“What is missing in this cycle is the construction of apartments that can cater to people earning the median income,” says David Schwartz, CEO and co-chairman of Waterton, a multifamily developer and manager based in Chicago. “We have an affordability crisis.”
Developers like Waterton specialize in “value-added” projects that improve older buildings, raising the rents and attracting residents who want more than a typical, aging class-B or class-C property, but who can’t pay the kinds of rents currently being charged for new class-A apartments. These value-added projects benefit from the strong demand for apartments overall, without having to compete with the hundreds of thousands of more expensive, luxury units now under construction.
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