Franklin Street’s Jonathan Hawks, Senior Director of Multifamily Investment Sales, recently served as an expert panelist at Interface / France Media’s 2022 Nashville Multifamily Conference. Alongside fellow CRE experts, Jonathan shared his insight on challenges and opportunities in the market and the trends investors should be watching as we head into the new year. See highlights from the enlightening discussion below:
- One of the biggest challenges right now is managing seller expectations. Many owners are not in tune with the current market environment and are grappling with the fact that their properties aren’t worth what they were 6 to 12 months ago, during the peak of the market. With interest rates on the rise, among other factors, we are seeing fewer properties trade, making those valuations we did for owners no longer valid.
- In this less certain economic environment, the best thing we can do for our clients continues to be serving as an advisor even if they aren’t ready to buy or sell. There are opportunities out there, and our team can help them decide which ones to act on and when.
- Nashville remains a top market for investors of all kinds, both private and institutional. However, we have seen a shift in the product type investors are targeting. For years, properties built in the ‘60s, ‘70s and ‘80s were viewed as the most desirable value-add deals in the Nashville market. However, now that most of those properties have traded several times over, it’s difficult to make the value-add model work the way it once did. Instead, we’re seeing investors target properties built in the ‘90s and early 2000s, which provide more value-add runway.
- Overall, Nashville still has a huge population of renters coming through that is going to keep this market very strong and competitive. While we can expect slower activity and rent growth in 2023, at least during the first half of the year, this market has numerous factors working in its favor that will help it prevail through the recession.
Seeking an advisor to help you navigate Nashville’s multifamily market? Contact Jonathan [email protected].