Dylan Taylor, president of U.S. operations at FirstService Real Estate Advisors, will take on a new role in April after FirstService merged with Colliers International: He will become CEO of U.S. operations for the revamped Colliers, which is based in Seattle. Multifamy Executive senior editor Les Shaver took some time to chat with Taylor about what he’s seeing in the apartment business right now and how the changes will affect Colliers—one of the leading brokers in the multifamily space.
MFE: What impact did the recent merger have on Colliers' multifamily business?
Taylor: FirstService Corp., which is the parent company to the license bondholder for Colliers International in the United States, is the largest residential property manager in North America. We have more than 1 million units under management. One of the advantages that we have as a platform is that we have a very large, robust multifamily/residential property management company that we can leverage for the benefit of multifamily relationships that we might have with institutions. We’re excited to bring that to bear. Multifamily is a priority. It’s one of the key brokerage segments that we’re recruiting into. For example, we just hired Kitty Wallace in Southern California.
MFE: Should we expect other additions like this?
Taylor: Yes. You can expect to see us add several notable multifamily producers. We’re committed to the space. We’re attracted by the space. We have a strong offering, and we want to continue to build on it.
MFE: How does management support the brokerage arm?
Taylor: There are a couple of dimensions. One is in the special servicer arena. A lot of the special servicers are looking for more of an asset management-type solution for someone to help them understand what they have, reposition the asset, and dispose of it. Obviously, if you have a property management arm, in addition to the brokerage arm, you’re able to be more of a full-service pair of hands for the special servicers. Also, for larger multi-geography multifamily relationships, our ability to potentially do residential property management for them could be attractive and be more of integrated one-stop shop offering. We’re seeing advantages in both those categories of users.
MFE: Will your broker coverage change?
Taylor: We have a few geographies that we’re going to backfill, primarily in smaller markets in the Midwest such as Kansas City and Cincinnati. But it’s nothing substantial and nothing of any significant impact. We’re focusing on multifamily brokers in the major markets. We’re bullish on multifamily. We think it’s a great segment and that, going forward, it will be an even more important segment within the real estate industry. We intend to be a leader within multifamily.
MFE: What’s driving deals right now—a proliferation of distressed assets or increased confidence among buyers?
Taylor: We’re seeing both. Right now, we’re seeing a lot of Canadian money come to the market. They have a lot of dry powder. They’re looking at Phoenix, Ariz.; Las Vegas; and Florida. We’re also seeing acceleration in workout deals as well.
MFE: What other things do you see in the multifamily sector?
Taylor: We continue to see flat occupancies.
MFE: Do you think things will bottom out this year?
Taylor: We do, but what’s hard to understand is the exact nature of the concessions. A lot of that is pretty opaque to really understand. The other thing that we’re a little bit concerned with is the shadow capacity for condos and single-family residences for lease. We’re a little bit concerned about that. We see it bottoming out in 2010. Our question is: In what quarter? Right now, we’re not entirely clear.