The National Apartment Association, recently sat down with Ashcroft’s Chief Investment Officer Scott Lebenhart to discuss a number of topics, including investment philosophy, growth in the metro Atlanta market, expansion into North Carolina, and their plans for 2023.
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What are your investment and growth plans for 2023?
Lebenhart: 2023 will be a very interesting year for all of us in the multifamily space. In a general sense, we plan to continue to pursue high-quality properties in strong Sun Belt locations. More specifically, we will focus our acquisition efforts on unique properties that feature mostly two- and three-bedroom units and offer residents home-like features such as direct/indirect access garages, large floor plans and
At the end of 2022, we entered the North Carolina market with our purchase of Midtown 501 in Chapel Hill, and we intend to build a sizable presence over time in the Raleigh-Durham-Chapel Hill area that will afford us economies of scale.
Over the course of 2023, we will look to continue to acquire properties in our existing Sun Belt markets (Dallas-Fort Worth, Atlanta, Orlando, Tampa, Jacksonville and Raleigh-Durham) while also pursuing opportunities in South Florida, Austin, San Antonio, Charlotte, Nashville and Phoenix. The current volatility in the capital markets can make acquisitions a challenge, but we remain committed to taking advantage of the right opportunities when they present themselves.
Broadly speaking, how do you see the apartment market performing in the year ahead, and what will the investment sales landscape look like?
Lebenhart: Given the rise in interest rates and the resulting spike in the cost of homeownership, we believe demand will continue to remain strong for rental housing. In our own portfolio, we are still seeing rental growth and strong occupancy rates. We continue to see strong demand for the units that we renovate.
As for investment sales, word of some deals here and there is beginning to trickle out, which is helping to create those data points and benchmarks that everyone is looking for. It’s clear there is still significant capital pursuing multifamily properties. However, the debt market remains volatile, but lenders are working to get creative in order to give borrowers options on both acquisitions and refinances. Until there is some more clarity on interest rates and the price of debt, sales will continue to be slow, but I expect some clarity midway through the year, and transaction volume should pick up at that point. As more deals begin to happen, I believe that will help to restore some investor confidence. And while some distressed sales definitely will occur throughout the year, I don’t expect the flood of these properties later this year that some others are expecting.
“Investing in the Future” National Apartment Association, 18 May, 2023, https://www.naahq.org/investing-future.