What's the hottest/most lucrative property type to be getting into right now?

Swedish_1's picture
Rank: Senior Baboon | 247

Is it hospitality? That seems where higher margins are. I know everyone and their mom is in multifamily but the lower cap rates make me think that entails lower comps.

Comments (8)

Feb 14, 2020

I don't have an answer for this, because i don't think there is one. But you do realize, trading at lower cap rates mean higher values right?

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Feb 14, 2020

It also means lower returns which you can assume leads to lower comps for people in acquisitions.

Most Helpful
Feb 15, 2020

That's not necessarily true at all.

If I'm underwriting a core deal in a CBD to a 12, generally my waterfall hurdles are much lower than if I'm underwriting spec office in suburban BFE to a 25. My AM fees, Acq/Dev fees, PM fees, CM fees are going to generally be higher by virtue of deal size.

Honestly, if you're looking for something lucrative go work for a master developer who has super low head count and does massive deals across all of the major property types. Work your ass off and get a piece of the pie 6-10 years down the road, and you'll be sitting pretty. However I'll warn you everyone under 40 on this forum is looking for that exact opportunity so rather than worrying about your comp, find something you like to do and do really well at it.

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Funniest
Feb 14, 2020
Swedish_1:

the lower cap rates make me think that entails lower comps.

math

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Feb 14, 2020

If by "most lucrative" you mean the potential for most profit, then it would still be spec retail or office development.

If you are looking for best risk adjusted return, i would say core-plus multifamily, that's why there is so much interest in the space.

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Feb 14, 2020

The hottest property types will by virtue be some of the least lucrative.

Feb 14, 2020

I should clarify, I mean hottest/ best paying property type to be in as an acquisitions guy.

Sorry, English isn't my first language

Feb 15, 2020
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