Ryan Cos.’ multifamily business develops and delivers Class A apartment communities nationwide through a vertically integrated platform that combines development, design, construction, and capital markets. Over the last decade, the firm has completed 85 developments with over 16,000 units and a total project value of $5.7 billion. Bryan Lamb, executive vice president of multifamily, shares what’s in Ryan’s pipeline, today’s biggest challenges for developers, and the benefits of new construction.
What makes you most excited about multifamily development in the current environment?
We’re nearing the start of a new real estate cycle, and, historically, the first wave of development starts outperforming the next wave of projects that may follow two to three years later. Ryan is extremely well-positioned to benefit from that first-mover advantage, as we have a robust, national pipeline of basis-focused development opportunities that we have been advancing through predevelopment for the past couple of years.
Additionally, the relative risk-adjusted value of development as compared to “value-add” acquisitions is becoming increasingly apparent to the capital markets. Cap rates have remained low despite still-elevated interest rates, making it extremely challenging to buy assets at attractive prices with positive leverage. So, opportunistic capital will need to lean more on development to obtain its target returns.
What would you describe as Ryan Cos.’ bread-and-butter product types and markets?
We can and have developed all multifamily product types from 50-story towers to garden-style communities. That said, in today’s market, we are largely focused on wood-frame products, including garden-style, wrap, and select podium in first-ring suburbs or non-central business district neighborhoods of cities like Banker’s Hill in San Diego.
Our market focus is aligned with our office locations. At the end of the day, despite the global opportunity funds and the concentration of capital with the mega-managers, real estate, and particularly real estate development, it’s still a local business that requires boots on the ground and local expertise. So, we have built up teams in our target markets, including, but not limited to, Atlanta; Austin, Texas; Central Florida; Dallas; Denver; San Diego; and Seattle.
What’s in Ryan Cos.’ pipeline for 2026?
We have a $1.2 billion controlled pipeline of multifamily development opportunities comprised of 11 deals and nearly 3,000 units, largely in the markets referenced above. We are particularly high on the shovel-ready deal we have in the north Seattle neighborhood of Greenwood, where the city of Seattle is working with developers to help get development projects started, as there is a clear need for additional housing across the city.
What does new development provide today that acquisitions cannot?
In a word: yield.
We are sizing development deals to deliver a 6.25% to 7% untrended return on cost, which will then stabilize to a 6.75% to 7.5% stabilized return on cost with modest rent growth assumptions. On the other hand, acquisition cap rates for anything you’d really want to own are in the 5% to 5.25% range, which is at or below the cost of debt in most cases. Buying at a 5-cap with the same rent growth assumptions means you’re still stabilizing around the cost of debt unless you can push rents materially through a renovation program. Those upgrade premiums have proven increasingly challenging given the abundance of new products that surround many of these value-add deals at comparable rents.
Are there still markets or asset types where value-add can work?
Yes. There are opportunities out there, specifically in markets that haven’t been significantly oversupplied in this last run-up. We are not actively looking for those opportunities, but I still monitor the market closely as I was active in that space for the last 10 years when I led the multifamily platform at EQT Exeter (now EQT Real Estate). I think some of the larger secondary markets such as Kansas City, Missouri; Indianapolis; and Richmond, Virginia, can still yield some opportunities.
Many investors view development as inherently riskier. Why do you argue the opposite in today’s environment?
I don’t think there is any question that development is riskier and more difficult than buying an asset, both in terms of the composition of your return (cash flow versus exit) and the actual execution.
That said, a good developer, like Ryan, can manage and mitigate the execution portion of that risk by handling entitlements, design, and construction entirely in-house, as we have for decades across more than 15,000 units. With this part of the risk profile mitigated, the investor’s focus can shift to cash flow and returns. We think delivering new, customized assets at a 7% return on capital into what we believe will be an attractive sell-side market in three or four years is a better risk-adjusted option than buying an outdated product at a 5% cap that needs renovation and then still has to compete with new products.
What development challenges keep you up at night?
The standard challenges of any development project haven’t changed much over the 20-plus years I've been doing this. There are always going to be NIMBYs, scope gaps, change orders, and schedule challenges.
What worries me today is the absence of stability in our national and global political environment. Construction projects are, more or less, 50% materials and 50% labor. So, imposing tariffs and restricting labor flows has an unquestionable inflationary impact that is detrimental to construction activity and raises doubts among investors.
Additionally, the U.S. multifamily sector comprises a global network of investors. Many of these foreign investors are not happy with U.S. policies right now and are at least rethinking, if not adjusting, their commitment to U.S. real estate. That is impacting capital flows to a degree and further restricting transaction activity. We need logical, predictable economic and immigration policies, combined with a return to a more open market trade environment, to unlock the capital markets and get projects started. With that, we can focus on making sure the plumbing risers don’t conflict with the ductwork.
How does building new allow you to better match what today’s renter wants compared to repositioning older assets?
A new product lets you customize the program to match current trends. We can monitor the market to determine which unit type and size are outpacing the others, and then ensure that our new product and program meet that need.
Additionally, housing has become an increasingly larger component of everyone’s budget in recent years and has contributed significantly to a strain on household finances across the United States. As a developer of new product, we must be aware of that and make sure that our new product meets people where they are. We can do that by delivering slightly smaller units and including more of them in our program to better match a renter’s target price point. This gives us the best chance to keep the rents at or below 30% to 35% of the target resident’s annual income.
What design or amenity decisions today have the biggest impact on lease-up success?
Most new communities have a standard amenity kit, including a lobby, a fitness center, a coworking lounge, a community room, and a dog run. I think the driver of lease-up is more about how all of this works together and the general aesthetic and atmosphere in which they are assembled.
If you have the standard “must-haves,” then it comes down to feel and the importance of a welcoming lobby and tastefully appointed amenities. Good architecture and interior design are critical contributors to lease-up success.