Where are the opportunities in today's market? Land (especially infill sites), taking over broken condo deals, and full apartment plays, say the panelists of a session that discussed strategies in the struggling economy.
Moderated by Dave Woodward, CEO and managing partner of Laramar Communities, the panel offered tactics for succeeding in the current credit environment. The panelists were Mark Wallis, senior executive vice president of UDR; Robert Hicks, vice president of Mark-Taylor Residential; and Mark Humphreys, principal of Humphreys and Partners Architects.
Humphreys, whose firm focuses exclusively on designing multifamily projects, said that his work shifted from 70 percent condos last year to 90 percent apartments this year-and business is going well. "We have also seen developers shift from high-rises to low-rise and mid-rise apartment communities," he added.
Many companies can still bring projects to market successfully, despite the current economic challenges, the panelists said. Their suggestion was to employ different methods than in the past, such as converting condo projects to apartment communities or reducing the number of stories in a project. In addition, Humphreys suggested offering unusual designs. Wallis, meanwhile, felt that keeping powder dry until you secure better financing might be a good approach in cities that have been significantly affected by the downturn in the housing market. And all the panelists believe that adding new product into the mix, such as an affordable housing component or boutique hotel, might make a project more amenable to investors.
This doesn't mean avoiding any and all condo projects. "Properly done condo communities, done at the right price point, will still be successful," Wallis said. But apartment communities are still a sweet spot, Hicks added. "There are a lot of homeowner association companies out there looking for business; they want to reposition their assets while retaining the community base that's already there," he said.