Jansen Multifamily Team Blog

Why to Sell in Today’s Market

Published March 8, 2010 Commentary Leave a Comment
Tags: apartments, bottom, bush, buying, cap rates, capital, capital gains, cash flow, commercial real estate market, current market conditions, dupre + scott, economy, equity, fannie mae, Financing, freddie mac, hit, inflation, interest rates, jansen, liquidity, market, multifamily, multifamily lending, obama, positive financial leverage, power, price appreciation, property values, puget sound, rate, relative, seattle, sell, Team, to, today's, value, why

Last month, the Jansen Multifamily Team polled Puget Sound apartment investors about their impressions of the current market. That poll data, coupled with our own observations form the basis for a three-part series on the “Why’s” of today’s Puget Sound apartment market. This week’s post, number two of three, discusses why to sell in today’s market.

Generally speaking, nobody wants to sell in a market like today’s. Values have come down 15-20% off their market peaks, significantly eroding many investors’ equity in their assets, and the prospective buyer pool has shrunk as many investors wait on the sidelines until the market clearly “hits bottom.” For many Puget Sound apartment investors, now may seem like the wrong time to sell. However, the situation is not completely dire, as there are still strong reasons to sell today, including the opportunity to re-leverage, the availability of cheap debt, and a historically low capital gains rate.

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Why to Buy in Today’s Market

Published February 26, 2010 Commentary 3 Comments
Tags: apartments, buy, cap rates, cash flow, current market conditions, economy, fannie mae, FHA, Financing, freddie mac, inflation, interest rates, jansen, jansen multifamily team, liquidity, market, multifamily, net operating income, positive financial leverage, property values, puget sound, real estate, seattle, value investing

Last month, the Jansen Multifamily Team polled Puget Sound apartment investors about their impressions of the current market. That poll data, coupled with our own observations form the basis for a three-part series on the “Why’s” of today’s Puget Sound apartment market. This week’s post, number one of three, discusses why to buy in today’s market.

In last month’s JMT poll, 50% of respondents indicated they are an active buyer in this market. It seems likely that those active buyers are beginning to see the same things we see: opportunities to achieve positive financial leverage, acquire quality assets in historically strong locations, and hedge against oncoming inflation. These three reasons are the most compelling rationale for acquiring multifamily properties in the Puget Sound region in today’s market.

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Old Bull, Young Bull

Published February 3, 2010 Commentary 3 Comments
Tags: real estate, puget sound, apartments, seattle, multifamily, commercial real estate brokers, client communication, interest rates, market, investment, Financing, jansen multifamily team, net operating income, cap gap, brokerage, leadership, intrinsic value, management, underwriting, inflation, coast sperry van ness, tom hoban

The following post was guest written by Tom Hoban, Managing Director of Coast|Sperry Van Ness and CEO of the Coast Group of Companies:

The gap between our client’s offer and the seller’s asking price was huge. Call it a “Cap Gap,” or just a market moving faster than the seller wanted to believe, but the reality was that the NOI (net operating income, the fundamental basis for value) of yesterday and the NOI of tomorrow were some distance apart. As a result, the separation between the bid/ask would be of commensurate distance.

My broker, a very skilled, younger fellow hitting his stride, presents our client’s offer. The broker on the other side is, by all accounts, one of the biggest names in the business. It’s his mountain and he likes being on top. My guy is just a another young bull trying to get up the hill to knock off the old bull.

It’s the first offer from our buyer and everyone expects it to be something less than the asking price. The principals and the brokers are all in the same room, so people’s reactions once the offer is presented will dictate who moves further to get a deal done. The old bull has seen this scene before. Many young bulls have attempted to get to and stay on the top of his mountain. The tension in the room is palpable.

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