Despite a for-sale market that continues to flounder, multifamily operators are enjoying a good business environment and should be preparing for even more opportunistic times ahead, according to the "Market Watch" general session panel on multifamily opportunities. The panel featured top-tier executives Stan Harrelson, CEO and president of Seattle, Wash.-based Pinnacle, an American Management Services Co.; Steve Fifield, founder and chairman of Los Angeles-based Fifield Cos.; and Ron Ratner, president and CEO of Cleveland, Ohio-based Forest City Residential.
"Our rental portfolio is doing extremely well," Ratner said. "When rent growth drops from 8 percent to 5 percent, you can't complain too much. You need to plant the seeds, because the two- to four-year horizon still looks pretty good."
Fifield agreed, but believes that multifamily operators should "tread carefully" until the impact of the shadow rental market from subprime foreclosures is fully realized. The panelists also addressed trends in green building, and agreed that, while multifamily is not as far along as the commercial building sector, the trend towards sustainable business practices is undeniable. "Our employees are pushing us to incorporate sustainability, and we require each project to go through the LEED checklist?regardless of whether or not they are shooting for LEED certification," Ratner said. "If you are not paying attention to water, to waste, to energy, you are fooling yourself."
In citing market opportunities, the panelists agreed that it's critical to position properties and firms now for the multifamily market of the next decade. They also recommended a focus on land control and acquisition. "Our challenge is the shift in equity players and dealing with foreclosures; our opportunity is the fundamentally strong multifamily market," Harrelson said. "We are on the precipice of a new time in our industry, and we are trying to control as much land as we can."