The equity multiple is a metric central to real estate investment, as it succinctly defines how much return an investor might garner on their investment. In simple terms, “How much could I get back for every dollar I invest?”
Last week, the Bureau of Labor Statistics reported 236,000 jobs added to U.S. payrolls in March, which, while lower than economists had expected, is still indicative of the resilience of the labor market.
When considering what types of investment to add to a portfolio, different investors will have different tolerance levels for risk. While some might be willing to take additional risks in order to possibly garner a higher net return (value-add), others prefer a real estate risk profile on the lower end of the scale (core) and others might want something in between (core plus).
CONTI Capital’s approach to multifamily investment favors markets with flourishing industry clusters, as they tend to be associated with higher levels of productivity, innovation and a skilled workforce. Texas’ energy sector is one of the oldest industry clusters in the U.S., and although the oil and gas industry tends to move in line with oil prices, we believe the industry can be a critical component of a thriving regional economy.
The shifting landscape of housing in America has far-reaching implications for commercial real estate (CRE), and very direct impacts on multifamily real estate. This piece provides a brief history of how we got to the current housing situation, and lays out the ongoing consequences for multifamily.
Dallas is CONTI Capital’s #1 Market for Multifamily Investment for the first half of 2023. CONTI Capital analyzed 50 major U.S. metros using the CONTI Index, our proprietary data modeling tool that measures more than 400 leading performance indicators. According to our own data analysis, the industry diversity of Dallas’ labor market and the significant proportion of residents that fall within CONTI Capital’s “prime renter” age range are the primary factors that boosted Dallas to the top of our list for the second time in a row.
In this piece, we will touch on why a recession could occur this year and parse some historical data demonstrating the performance of multifamily real estate in times of economic uncertainty.
In the early months of the COVID-19 pandemic, housing construction starts took a drastic dip as builders paused to take stock of the unusual circumstances. While construction ramped back up again in the later months of 2020, the monthslong pause only served to exacerbate an existing housing shortage of both single-family and multifamily homes.
As of 2019, most state pension funds had at least 65% of their assets in stocks and alternative investments such as private equity and real estate, again according to Pew.
The crux of it is, while some major metros rely heavily on one major industry – auto manufacturing in Detroit, leisure and hospitality in Orlando, oil in Houston, et cetera – Dallas’ job market is robust on multiple fronts, making labor an especially stout pillar of the local economy.
