Money, money, money. For the past three years, the ever-growing flow of capital has been all the talk among apartment executives, investors, brokers, and industry-watchers. The conversation was no different at this year's MFE Leadership Summit, held March 15-17 in Vail, Colo.

But the tone of the discussion was very different indeed. One telling anecdote came from Jim Hurley, now CFO for New Faze Development in Sacramento, Calif. Hurley, formerly portfolio manager for the California State Teachers' Retirement System (CalSTRS), recalled how, in the past, he, as the much-courted capital source, would be the one arriving a few minutes late to meetings with eager potential multifamily partners. Recently, though, the tables had turned, Hurley noted. Now it was the apartment executives, not the investors, who were running late!

Hurley's peers on the institutional investment panel in Vail echoed his observations. “Today, capital really is a commodity,” said Jeffrey L. Goldberg, managing partner of the Milestone Group, a national real estate investment firm that owns more than 20,000 apartments. Between foreign and domestic investors, private equity, and return-hungry pension funds, there are more dollars than deals available today in the multifamily industry. Just look at the advent of specialty funds focusing on workforce housing, green development, and other niches. “Everybody's looking for a story,” Goldberg told me by phone as we prepared for this panel.

The capital commodity situation, which certainly represents a departure from the past, provides new opportunity and influence to multifamily firms, who have the chance to choose their financial partners, craft more favorable deals, and maybe, just maybe, be valued more appropriately for their operational expertise.

“Thank goodness the operators are finally in control,” said Rick Cavenaugh, president and CEO of Fifield Co., a Chicago-based real estate developer who recently announced a joint venture with a California insurance company to build rental apartments.

After all, who's going to manage all those apartments? Certainly not insurance companies, European banks, or Middle Eastern investors, to whom multifamily real estate represents an investment decision. No, it will be the American apartment operators, such as the Chicago-based Laramar Group, which recently raised a new $350 million fund to purchase value-add properties across the country. It will be the Bozzuto Group, whose management company oversees 21,000 units, primarily in the Mid-Atlantic. It will be firms such as Milestone, which fee-manages an additional 10,000 units beyond its own portfolio.

How long will this newfound influence last for apartment operators? No one knows, just as no one can predict how long the capital will keep coming, even as they marvel at its abundance. “What you don't realize is the fragile nature of Wall Street,” war ned Goldberg, who is based in New York. “All it has to do is sneeze and the capital markets will dry up.”

Alison Rice, Editor