Outlook - (MF)CRE industry 5 - 10 yrs

Curious of everyone's opinion on where things are headed going forward with MF and CRE in general. From reading/ talking with peoples I can see issues lie in struggles to acquire good debt, construction costs, and inflated valuations based properties bought at historically low cap rates. There seems to be a lot of negativity focused on office / retail and I am curious to hear opinions on MF and the industry as a whole going forward.

 
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Everyone is going to have their own outlook so you're going to get a lot of various answers. If everyone had the same opinion there would be no competitive advantage in investing. Personally I see the MF space in particular being a constant demand that isn't going away unless there was an absolute paradigm shift in how we live. People are always going to need housing and there will always be a portion of the population that needs to rent whether it's cost related or just short term housing. But, since housing is becoming more and more unaffordable people are going to be forced into renting for longer than they'd want to. Rents might not grow as fast as they have in the past few years as more units come online, but it should be a good hedge against inflation with raising rents 2-3% every year to keep up with opex costs. People will also back down off the aggressive cap rates when more owners are desperate to sell, which might take a while but we are already seeing some pretty drastic movement. Other asset classes like office and retail might become antiquated (I personally think there is always going to be demand for both, but maybe a shift in how they are needed), but everyone needs a place to live with a roof over their head and have their needs met. Multifamily meets that basic human need so unless that need gets met through another avenue, it will always be a demand. 

 

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