January 14, 2023 Weekly Investor Update

Life Bridge Capital Weekly Investor Update

January 14, 2023

The Latest in Commercial Real Estate (CRE), Economy & Markets





Mortgage Rate (30-Year Fixed): 6.33% (as of 1/12)


Existing Home Sales: -7.7% (November 2022)

New Residential Sales: +5.8% (November 2022)

Median Sales Price for New Houses Sold: $471,200 (November 2022)

Construction Spending: +8.5% YoY (November 2022)

New Residential Housing Starts: 1.427 million (November 2022)

New Residential Housing Completion: 1.490 million (November 2022)


Homeownership Rate: +66.0% (3Q22)

Rental Vacancy Rate: +6.0% (3Q22)


Sources: NAR, BLS, Federal Reserve Bank, MBA

Note: Rates listed are estimates and may not reflect actual rates depending on term, sponsor location, and other factors involved.



10. Kansas City’s multifamily market performed strong in 2022

In an interview by REJournals with Leah Fitzgerald, managing director of CBRE Kansas City, the city’s multifamily market was cited for being the strongest performers together with industrial properties in 2022. According to Fitzgerald, “We have very strong multifamily and industrial teams here. That certainly helped.” However, she cited the cost of debt and higher construction costs as the main factors that could affect new multifamily construction in the coming months. In addition, parking areas are scant and will need to be considered by developers looking into constructing new real estate projects.


9. Multifamily investing provide opportunities in 2023, according to investment firm

Ken Munkacy, senior managing director at Kingbird Investment Management, believes that the long-term positive fundamentals of the multifamily asset class in 2023 provide huge opportunities for investors. Among the factors that will continue to drive demand is the strong need for workforce housing that will cater to those who cannot step into the class-A building ladder and have stayed in their rental units for years now. Munkacy sees strong growth in multifamily housing demand in Dallas, Huntsville, New York City, and Los Angeles because of the new investments in tech, infrastructure, media and aerospace.


8. Two multifamily properties in Omaha sold by Greystone

Greystone Housing Impact Investors reported the sale of two 294-unit multifamily properties in Omaha. The company plans to use the $27.7 million sales proceeds of Vantage at Stone Creek and Vantage at Coventry to construct an affordable multifamily project aimed at senior citizens and students. The company continues to evaluate opportunities in multifamily heading into the year.


7. St. Petersburg, FL gets proposal for 1,058-unit multifamily development

Tampa developer Porter Land LLC is planning to develop a 1,058-unit garden-style multifamily property in a 29-acre industrial lot at 1501 72nd Street North, near Tyrone Square Mall in St. Petersburg, FL. The affordable housing project will have half of the units for households earning less than 80% of the Area Median Income (AMI) and the other half will be marketed to households earning less than 120% of AMI. Construction is expected to commence this year and residents can move in beginning in 3Q24.


6. Round Rock, TX approved more than 2,400 multifamily housing units in Nov-Dec 2022

Round Rock city officials announced that it has approved more than 2,400 multifamily housing units through rezoning requests, which represents 18% of the city’s 13,436 multifamily units as of October 2022. The city is expecting to expand its approvals in the coming years to accommodate the growing population in the area, which is expected to exceed 265,000 by 2040. Brad Wiseman, Round Rock Planning and Development Services director, commented that the apartment development in the city remains “very hot” due to the huge demand for housing and rising cost of single-family homes.


5. Multifamily housing construction starts remain high, according to Wharton professor

Susan Wachter, Wharton professor of real estate and finance, commented during a Wharton Business Daily radio show episode last week that the multifamily rental housing market continues to be a good investment. “People don’t want to be and can’t be a homeowner at these prices,” she said. “Potential first-time home buyers looking at these prices who are not qualified or can’t buy are going into the rental market. Multifamily construction has been booming. We have an oversupply of multifamily housing. Multifamily housing construction starts have been very, very high. That’s good news because we do have a structural deficit of housing across the board.”


4. Investments in Texas multifamily will be on a roll in 2023

John Tuohy, CEO of SWBC, wrote in the Houston Business Journal last week that multifamily real estate in Texas will remain healthy as families and businesses are drawn towards the state’s affordable university tuition and business-friendly climate. Tuohy also cites the very strong demand for multifamily real estate itself, which cannot be matched by the 6% increase in supply in the past two years. In Sherman, where a new Texas Instruments plant will be constructed, growth is expected – which will be fueled by about 80,000 migrants. A total of 12,000 apartment units are already in the pipeline in the area.


3. Berkadia forecasts midwest cities’ apartment rents to grow this year

Berkadia’s 2023 multifamily forecast lists Columbus, Louisville and Indianapolis as some of the midwest cities that will experience a 3.8% YoY growth in apartment rents this year. On the other hand, apartment inventory is expected to be robust in Nashville (+3.8%) and Austin (+7.9%). Around 565,200 new apartment units are expected to be delivered throughout the country in 2023, which will be the highest number of annual apartment unit deliveries in the country in more than two decades.


2. LV Collective JV to construct 48-story community in Austin

LV Collective, together with JE Dunn Capital Partners and ELV Associates, has announced its plan to construct a 48-story, 557-unit multifamily project at 80 Rainey in Austin, Texas. The formal groundbreaking is slated for 1Q23. It will be comprised of 20 units designated as affordable, and more than 7,000 sq ft of retail space. Studio, one-, two- and three-bedroom apartments will be offered.


1. Multifamily renewal rents rose in October

Yardi Matrix’s 30-market analysis indicated multifamily renewal rents rose 11.8% YoY through October, up by 30 basis points from September. The group concludes that property owners are trying to bring the rents of existing tenants closer to current asking rents. Growth in asking rents was the highest in Miami (19.2%), Tampa (18.9&) and Orlando (16.6%). National lease renewals, on the other hand, reached 64.9% in October.


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