After spending a couple of days with multifamily players in Las Vegas at the Apartment Finance Today Conference, "Meet the Money," from April 2–4, we're convinced that worklife behind and beneath the giddy headlines is anything but giddy.

Clearly, expectations around the fundamentals of demand are high and rising higher. Just as evident, supply has been at a low ebb for what seems like forever, and it also seems like what's coming out of the housing stock through obsolescence is doing so at a level accelerated by neglect, lack of resources, or both.

The biggest takeaway we can offer up after listening to the tentative and hyper-selective way capital is working into the arterial network of the multifamily gross domestic product is this: If you don't need money, you can probably get more of it. If you do need money, you're going to have to do an awful lot right and pay a lot for the privilege of having people profit from your borrowings or need for equity.

Fundamentals may be lifting the tide, but it seems that the tide refuses to lift all ships ... at least so far. What's more, around the next corner could be a continued leg up in the journey from recovery to prosperity or, equally plausible, a turn back to defensive mode.

For those who're in the hunt for construction finance, or any other form of debt or equity, the smartest thing is to need less and you'll get more. Now, that's not what a lot of people with deals that represent solid opportunities want to hear. What you want to hear is that since need-for-yield is thrusting money into the arena, your solid deal should be right in line for it.

What our conference attendees learned is that an agile combination of tactics and patience may get you there, and one of the most critical "givens" is a watertight net-operating-income execution that shows you know what you're doing with investors' money right now.

Without that ... you're cake.

Right now, a tepid but feisty pulse of economic resilience has begun to show signs of sustainability if not a spectacular snapback:

  • Job growth is lumpy.
  • Income expansion is bifurcated.
  • Household formations are two steps forward, one step back.
  • The timing is right for only a few locations, and the locations are right for another time line.
  • Fear in the form of regulatory overreach, uncertainty risk, last-decade hangover, or headline anxiety puts enough stress into each deal discussion that almost every time, it's going to take longer to get deals done.
  • In all, it's more than likely that some good deals will probably not get done, and bad deals, unless they're opportunistically bad, will never get done.
  • A good year begun is by no means necessarily a good year through and through.

If you look at the fundamentals of apartment rental demand, any broad-brush generalizations can be popped full of holes. Even this notion of pent-up demand is an assumption. We assume that demand will revert to a norm; but then we also are going out on a limb to assume that this pent-up demand will not revert to the same norm that existed before the housing crisis; i.e., toward homeownership. Our takeaway from the "Meet the Money" Apartment Finance Today Conference is essentially that the constant in any play for greater access to capital that is looking for a suitable return is solid operational performance.

That means good people, focus, residents who feel they're getting value, and a plan.

What could be any easier than that?

Except that it's only easy on paper.