Market Insights September 2022

Market Insights September 2022

Now that the dust has settled on the first half of 2022, it is important to take a moment to consider the climate surrounding commercial real estate, specifically multifamily. The record-breaking transactions and high rates of returns of 2021 have given way to a much less steady investing environment, which resulted in a slower, but not stalled, rate of capital movement. 

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COO Julie Blank Joins Claire’s Place Foundation Board of Directors to Raise Awareness for Cystic Fibrosis

Honoring her late husband’s cystic fibrosis journey by assisting others, COO Julie Blank has joined the Board of Directors with Claire’s Place Foundation, a non-profit organization providing support to children and families affected by cystic fibrosis (CF).

“In 2007, my husband passed away from CF, our twin boys were just three years old,” Julie said. “I am now in a place in my journey where I am ready to devote my time to a cause that honors my husband and other CF warriors. In my research, I found Claire’s Place Foundation. After reading Claire’s story and learning about her foundation, I did not have to search any further. Her energy, selflessness and love of life mirrored my husband.”

“It was a clear and unanimous decision to elect Julie to our board,” commented Claire’s Place Foundation Executive Director Melissa Yeager. “Not only does she bring her personal experience, but also a wealth of professional experience. We are honored to have her join us in fulfilling Claire’s mission here at Claire’s Place.”

Claire’s Place Foundation is a 501(c)(3) non-profit organization providing support to children and families affected by cystic fibrosis. The foundation is named in honor of Claire Wineland who lived with CF her entire life and died at the age of 21. She was an activist, author, TEDx Speaker, social media star and received numerous awards. Claire’s foundation was a way for her to assure that others living with CF enjoyed the same hope, strength and joy that she enjoyed. Recipient of Los Angeles Business Journal’s “Small Nonprofit of the Year” and “Fundraiser of the Year” for its annual Glow Ride, the foundation provides grants to families affected by CF, offering both emotional and financial support. Learn more: www.clairesplacefoundation.org.

Q2 2022 Quarterly Roundup

Q2 2022 Quarterly Roundup

There was a substantial dislocation on the institutional equity side of our industry as players continue to seek equilibrium regarding asset pricing and interest rate exposure. While still ongoing, consensus on whether or not the aggressive interest rate increases will cause a recession over the next twelve months is still a matter of debate. New Standard Equities is monitoring the debt and equity markets, yet remains bullish in the sector. While the effects of rising interest rates have had a significant impact on cash flow, rents across our entire portfolio have been rising at an unprecedented rate. Of course, rent is a part of the inflation metrics that the Fed is trying to control, but inflation is not the sole culprit behind the tremendous revenue bumps in NSE’s rent rolls. The firm’s investment thesis has always been to work in markets with a sustained imbalance in the supply and demand for housing. Further, the Acquisitions team has carefully selected markets that exhibit high education levels and cater to the knowledge economy. There have certainly been inflationary pressures in NSE’s markets on wages, but that’s also helped tell the story of why many properties are reacting well to leasing programs, often producing lease trade-outs ranging from 15% to 40%. Operationally, the firm is perhaps the strongest it has been since the beginning of 2020. 

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Julie Blank Moderates Panel at IMN’s 5th Annual Middle-Market Multifamily Forum: West

New Standard Equities COO Julie Blank joined IMN’s 5th annual Middle-Market Multifamily Forum: West as a moderator for the panel “Revenue Management, ROI Best Practices and The Amenities That Unit Owners Are Looking For In This Market”, or what Blank calls a little “R&R”. Panelists discussed ROI, NOI and technology, what works for smaller landlords, buildings and units, as well as how work from home has changed and what Gen Z is looking for. 

Held September 8-9, 2022 in Santa Monica, CA, the Forum brought together hundreds of small and mid-sized multifamily owners for networking and business development opportunities.  

Learn more here.  

Balancing Tech with In-Person Engagement in Property Management – Q&A with Stacey Darden & Multi-Housing News

The multifamily apartment industry, although slower than others at adopting new technology, has more recently been making strides towards integrating it into property management. In a recent Q&A with Multi-Housing News, Stacey Darden, the Senior Director of Innovation & Compliance at New Standard Equities Inc., spoke about technology’s growing role in successful operations at multifamily properties.

When asked about recent technological advancements in property management, Darden explained that pandemic restrictions revealed not all customers need to be toured around a community. “They can do their research at home and will only visit up to three communities they are seriously considering. This requires a robust community website showcasing the community in the best light, self-guided tours, a paperless and seamless application process through the lease signing and move-in,” says Darden.

Darden detailed the success New Standard Equities has in using a range of technology in day-to-day operations, including an analytics platform to review property performance in real-time, a CRM platform to centralize the flow of communication with prospective and current residents, email and texting capabilities, and Property Management Specialists (PMS), which is a repository for NSE’s financial and resident data.

In the face of the Great Resignation, technology can help with labor shortages by offering some self-service capabilities to customers. However, customers still want to know there is a human there for concerns, who will hear and address them.

Read the Q&A here.

COO Julie Blank Interviewed by Commercial Real Estate Pro Network Podcast

The technology used to manage multifamily systems is essential to both streamlining operations and fostering the relationships that are key within the multifamily real estate space. COO Julie Blank joined the Commercial Real Estate Pro Network podcast to discuss the role technology plays in bringing teams together in a geographically dispersed industry.

“The intrinsic nature of our industry creates natural barriers because of being geographically dispersed, so we do really rely on technology in order to bridge that gap,” said Blank. “We have a lot of the portals: we’ve got investor portals that help us communicate with our investors, resident portals to help communicate with residents, employee portals to communicate with our employees, training portals, and reporting portals. But we still really focus on the face-to-face engagement because real estate is still a lot about relationship building.”

Listen to the episode here

Proptech Improves Employee, Asset Performance While Giving Residents the Autonomy They Demand – Stacey Darden Authors Article for REBusiness Online

The multifamily industry relies on technology to increase productivity and to help make strategic decisions across properties. In an article for REBusiness Online, Stacey Darden, Senior Director of Innovation and Compliance, discusses why selecting the right technology partner is critical in today’s tight labor market.

“Selecting a technology provider who will partner with clients and help customize reporting based on the client’s needs will not only decrease time spent reviewing multiple reports, it also will create a more consistent method for processing information,” writes Darden.

Read the full article here.

Balancing Technology with Human Interaction in Multifamily – Stacey Darden Authors Article for The Multifamily Journal

Technology in the multifamily industry has myriad benefits and can create efficiencies, including helping professionals make more informed decisions, improving property managers’ jobs and even playing a role in the labor shortage and leasing experience for property teams. In her article for The Multifamily Journal, Stacey Darden, Senior Director of Innovation & Compliance, examines how technology can contribute to successful operations while balancing this with face-to-face engagement to ensure everything functions seamlessly.

Read the article “Balancing Technology with Human Interaction in Multifamily” here.

Julie Blank Discusses Continued Growth in San Diego’s Multifamily Market with Western Real Estate Business

San Diego’s downtown skyline endlessly evolves as multifamily developers remain full speed ahead despite a changing economic landscape. Even with this growth, COO Julie Blank told Western Real Estate Business optimism from multifamily developers is fine, but caution should be exercised as well.

“Operators must take a strategic look at the demographics they are targeting and set their business plans to real-life scenarios,” Blank said. “What can residents actually afford? Business owners can’t be swayed into thinking that everybody can afford something a little bit better.”

In the current economic climate, New Standard Equities is looking even closer at expense reductions, centralized business functions, increasing in-place technology automation and cutting dividend payments, among other strategies, as it combats rising interest rates and property management costs.

However, Blank acknowledged that demand for multifamily is still there, particularly in expensive markets like San Diego.  

“With the increase in interest rates and the price of homes, multifamily is projected to continue to see high occupancy and rent growth,” Blank commented. “As rents continue to rise, so do home prices.”

Read the full Western Real Estate Business article here.

Apartment Owners Likely to Reap Rewards of Housing Market Headaches – Edward Ring & Julie Blank Discuss Favorable Multifamily Outlook with Bisnow

Ballooning home prices and rising interest rates in the for-sale housing market have served as an adrenaline shot for apartment demand, driving valuations up, but as inflation pummels the construction industry, the development pipeline still can’t keep up. In an interview with Bisnow, CEO Edward Ring and COO Julie Blank discuss why this is good news for existing multifamily owners but explain why they still need to be cautious.

“People are working, they’re paying their rent, they’ve gotten through Covid, and maybe they’ve been saving for years to buy a house — but suddenly the cost of everything about buying a house is way up, so they’re going to be renters still,” Ring commented.

A deep recession might bring the cost of housing down in a hurry, as it did in 2008, but in that case job losses would keep people in their apartments, Ring pointed out, though he’s skeptical that a recession in 2022 or 2023 would be the kind of implosion that happened during the Great Financial Crisis. 

“A lot of institutional money seems to be mistaking today’s outlook with that of 2008,” Ring said. “They’re bracing for another massive recession. There are some similarities, such as in rising home prices, but otherwise dynamics aren’t the same.”

In short, Ring expects home prices to remain relatively high, along with the cost of mortgages, as long as the Federal Reserve tries to tamp down inflation via interest-rate increases. Rising interest rates are expected to have a clear impact on housing sales and the current climate might make things tough for renters who want to own, but multifamily owners stand to benefit as renters remain in place. 

Despite an overall positive market outlook, multifamily owners should still be cautious, Blank told Bisnow.

“Operators must take a strategic look at the demographics they are targeting and set their business plans according to real-life scenarios,” she said. “What can residents actually afford? Business owners can’t be swayed into thinking that everybody can afford something a little bit better.”

Read the full article here.