Jan 23, 2023 | Media, PR
Los Angeles’ multifamily market is already experiencing uncertainty from rising rents and dropping vacancy, but high interest rates and the city’s looming tax on real estate transactions are adding to it. Bisnow spoke with New Standard Equities Founder & CEO Edward Ring on how this could impact L.A. multifamily investment in 2023.
During a recent attempt to acquire a property in North Hollywood, Ring saw firsthand some sellers attempt to exit the market before Measure ULA goes into effect and how this compares against an uncertain market and a buyer pool that expects to get an urgency discount.
“Everyone swarmed on this one property thinking it was going to be a deal, but instead, we came up pretty short in terms of where we thought value would be,” Ring commented. “Ultimately, the seller found out where the market believes the values to be and has elected not to sell,” he added.
The rising cost of borrowing is also putting pressure on the market but from a historical perspective, interest rates are “not too terrible,” adds Ring.
Read the full Bisnow article here.
Jan 20, 2023 | Media, PR
Despite historically staunch opposition from the multifamily industry, rent control is unquestionably gaining traction in municipalities around the country. Multi-Housing News interviewed New Standard Equities Founder & CEO Edward Ring on the silver lining of rent control in California but how poorly written laws could have adverse consequences in other jurisdictions.
“Rent regulation and the COVID moratoria helped keep rents from soaring out of control in California in recent years. This has forced cap rates down to unprecedented levels in the trendier markets,” commented Ring. “It may help the state stabilize through the next recession and a faster pace given the nature of tech employment and a persistent lack of housing supply. California doesn’t have that far to fall and recovery won’t take long.”
If cap rates compress by 250 points in the Sun Belt, it may cause pain for those who bought at peak pricing. California investors who bought similar product—but at a cap rate that compressed by 100 points, as the evidence suggests—may be rewarded for their investment in the Golden State, especially as wages are higher than average in California and supply tends to be constrained.
Despite these potential results, operators in cities that are implementing new rent control laws or make their laws too strict, may struggle to work under these constraints, explains Ring.
Read the full story “How Rent Control Ballot Measures Are Mounting,” here.
Jan 20, 2023 | Media, PR
With increasing interest rates, rising unemployment and other factors, real estate investors may have to settle for less profit in the long run, Founder & CEO Edward Ring told KNX News Radio in an interview.
“The days of buying property with near zero interest rate loans and expecting big profits could be over for a while,” Ring said. “You might need to be satisfied with a 10-12% annualized return with your appreciation.”
Although, he noted that even with a lower profit rate, when compared to the volatility or downsides of stocks or other investments, real estate will remain a preferred investment vehicle.
Listen to the interview here.
Nov 15, 2022 | PR
Interviewed on the Best Real Estate Investing Advice Ever podcast, Founder & CEO Edward Ring discussed the difference between a value-add and repositioning business plan, how he cautiously approaches repositioning apartment buildings, and which apartment interior updates have led to the most success for his business.
When discussing if there is a difference between a value-add business plan versus a repositioning business plan, Ring said: “I do think there is a difference. I believe you can have a value-add apartment project and understand you can make some upgrades like [renovate or add] a fitness center, but that’s the extent of it. However, you can also find a project in a B class position and there are no other B+ or A- luxury properties in the submarket, so in those circumstances, there is a true repositioning play. It’s a rebranding – taking your community previously be known as X and creating a new space for it as Y.”
Oct 13, 2022 | PR
Founder & CEO Edward Ring joined How to Scale Commercial Real Estate podcast to discuss market dynamics for Class A and Class B assets in the multifamily sector. Ring covered a range of topics including why there is value and opportunity on the west coast, how rent control is a major issue for the California multifamily industry, the dynamics of pricing in different markets, and more.
Listen to the full episode here.
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Apr 21, 2022 | Media, PR
Some multifamily investors, particularly private high net worth individuals, have been strategically leaving the West Coast for Sunbelt growth markets, but New Standard Equities Founder & CEO Edward Ring says it’s too early to write off the region. In an interview with GlobeSt.com, he explains that the capital trend out of the area is a mistake because the housing shortage provides great opportunity in both the short and long term.
“In California, greater Portland and greater Seattle, there is a tremendous shortage of housing and the available housing stock largely doesn’t meet the demand, and won’t for the foreseeable future,” said Ring. He explains that the demand comes from a highly educated workforce, many of whom work in leading tech and biotech industries and these fundamentals offset the political climate and other challenges of investing in the region.
“Investors may not love the political environment here, particularly in the Bay Area and Los Angeles metros, which admittedly adds some uncertainty to the region, but ultimately the fundamentals in the West favor multifamily investment. Over the long haul, we’ve all done quite well in navigating the complexities in this area,” he adds.
Despite headlines and the narrative that people are leaving California and the West Coast as a whole, Ring points out the current outflow isn’t a cause for concern. “If California, the world’s fifth or sixth largest economy did suffer seriously meaningful out-migration, I would assume that would have a devastating effect on the rest of the US, including the markets that are seeing investor enthusiasm for the first time. It would take a long time for this economy to be replaced.”
Read the full article here.
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