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Posted Aug 4, 2020

Managing multifamily assets: perspectives from 29th Street Capital and Waypoint Residential

Managing multifamily assets perspectives from 29th Street Capital and Waypoint Residential

Juniper Square’s Director of Sales, Melissa Houston, recently spoke with Christie Philbrick-Wheaton, Managing Director, Investor Relations, at Waypoint Real Estate Investments; and Robb Bollhoffer, Managing Principal and Director of Acquisitions at 29th Street Capital, to get their take on challenges and opportunities in the multifamily real estate market.

Although the sector has unique concerns, in many ways it’s also positioned for more stability—and success—than the office and retail spaces.

“You can’t sleep on the internet”

“My favorite quote is, ‘You can’t sleep on the internet,’” Philbrick-Wheaton shared. “People always need a place to live.

Multifamily housing, especially now, seems to be one of those kinds of bomb-proof asset classes. It’s a lot less volatile than the public markets and other asset classes.

The evidence speaks for itself. Rent collections remain strong. Real estate managers are quickly shifting their practices —views by appointment only, posting signage in buildings, closing common areas like pools and gyms, and fostering a sense of community through online chat rooms and virtual classes.

They’re using this time as an opportunity to reimagine the way they do business.

“We went through a full reinvention of our marketing program,” said Philbrick-Wheaton. “We had virtual collateral so we were able to create virtual tours. We now have self-guided tours—someone can arrive at the property and let the leasing team know they’re there. They get a code, and then they can show themselves around, and it’s on FaceTime so they have the ability to ask questions.”

Potential headwinds

“If unemployment continues and stimulus packages dry up, that’s very troubling,” Bollhoffer cautioned. “Then, people can’t pay rent and they’ve got to pay the bills and put food on the table. Rent is not going to be their top priority. So, the next three months are concerning. Collections, as everyone knows, have been much better than what anyone would have thought. But people are under-saved and it’s going to be an issue going forward.”

Because of this uncertainty, Philbrick-Wheaton stressed that communication with residents and investors is key, and that a high level of customer service is crucial right now.

Bollhoffer added, “Our investors are also very focused on collections and our teams on the ground have done a really tremendous job of connecting with all of our residents. They’re making sure that they have those touch points and that they understand everyone’s situation, whether they’re employed or not, and able to pay rent because of the stimulus benefit. We’re closely staying in contact with as many of our residents as possible, so that we know what the upcoming 30 to 60 days could look like.”

We try to be very creative with collections. We’ve set up a lotto system where if you pay your rent by the 3rd, you get put into the lotto. The winner gets free rent for a month.”

For Philbrick-Wheaton, ramped-up investor reporting is more important than ever.

Giving investors as much information as possible shows you’re doing everything you can as a fiduciary to be responsible for their capital. This is truly the most important thing we can be doing in this environment.

What does the future hold?

Although none of us has the magic crystal ball that will provide a full view of the coming months, Philbrick-Wheaton laid out what’s in store from a fundraising standpoint given current activity and realities.

There’s going to be a lot more capital flooding into real estate and specifically for multifamily investments. There’s going to be a lot of competition. Know your sweet spot and stick to it. You may not be able to do 10 deals this year, or you may do two deals this year. But if those two deals are solid, that’s definitely quality over quantity right now.”

Both saw opportunities for current and future growth and are fine-tuning their strategies accordingly.

“We’ve hired 15 people,” said Bollhoffer, “Most of those being at the senior level. We’ve actually taken this opportunity to acquire talented individuals. Due to layoffs or changes in business plans, we’ve seen a tremendous amount of talent that’s looking to find a home. So we’ve been bringing people on and expanding our footprint.”

From Philbrick-Wheaton’s perspective, this is indeed a time for staying agile and proactive.

We’ve reorganized our corporate structure to make sure we’ve got a better flow of information. Every day matters in this environment.

Click here to watch the full conversation.