There's no place to hide. That's the message out of the NMHC Apartment Strategies Conference, where 950 people gathered this week in a surprisingly strong turnout for the event in Palm Springs, Calif.
With the economy suffering devastating job losses and development at a standstill, executives across the multifamily real estate business indicated in panels on Wednesday that there will be no way to escape the financial grind of 2009.
The doom and gloom sentiments were pervasive but not overwhelming. "I think fortunes will be made over the next year or so," said Dave Woodward, CEO of Greenwood Village, Colo.-based Laramar Group. The firm is considering raising a second fund with Credit Suisse that would focus on distressed assets. Chicago-based Waterton Associates is likely to do the same.
At Mid-America Apartment Communities, the goal is to focus on yield management systems and ensure that their benefits work during good and bad times. "In this market, it's important to not overreact to every piece of bad news. That would be unwise," said Eric Bolton, CEO of Mid-America Apartment Communities, a REIT based in Memphis, Tenn.
"We're, above all, focused on operational performance and ensuring we are protecting the value in the assets we already own," Bolton continued. "Beyond that, given that our balance sheet is strong, we also are interested in looking at opportunities to capture new value growth for our shareholders that will likely become increasingly available."
Meanwhile, in the property management sector, several companies are looking to focus on revising pricing strategies and concessions in the year ahead. Many want to expand their fee management business altogether. "Now is the time that operations and systems performance become critical," says Stan Harrelson, CEO of Pinnacle.