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Highlights from the 2024 NMHC Apartment Strategies Conference

This past week, thousands of real estate professionals descended upon San Diego to attend the NMHC Apartment Strategies Conference and Annual Meeting.

Good morning. Welcome to the weekend edition of CRE Daily.

Before we jump into today’s issue, let’s talk about the sizzling US labor market. The recent 10-year U.S. Treasury yield surged to over 4%, driven by an unexpectedly strong jobs report on Friday.

So what? It appears to signal (yet again) that we are not in a recession.

But with consumer sentiment on the rise, the big question remains: When will the Fed reduce interest rates? Current shifts in investor expectations suggest a possible delay from March to June, aligning with a cautious approach amidst ongoing economic strength.

The bottom line: We're witnessing an economy that's grappling with increased uncertainty and simultaneously developing a healthier relationship with risk.

market outlook

Top 4 Takeaways from the 2024 NMHC Apartment Strategies Conference

downtown san diego nmhc

This weekend's guest contributor in CRE Daily is Brian D. Milovich, Co-Founder of Calvera Partners. As a multifamily investing expert, he'll provide insights from the 2024 NMHC Apartment Strategies Conference.

What happened: This past week, thousands of real estate professionals descended upon San Diego to attend the NMHC Apartment Strategies Conference and Annual Meeting. There, a distinguished lineup of multifamily experts provided insight. Here are four main takeaways from the conference.

1) Economic expectations: Inflation is declining towards the Fed’s 2% target. This will result in 3 to 4 interest rate cuts during 2024. Many markets are oversupplied with new housing, but one bright spot for demand is immigration. Over 3 million new immigrants will change absorption dynamics. To follow where the demand is headed, look to affordable destinations. Affordability was cited as the #1 reason people move to a new market.

2) Multifamily forecast: Jay Parsons, SVP, Chief Economist, RealPage, sees a steep drop off in apartment deliveries in 18 months. He notes that construction delays today aren’t short-term. This will re-accelerate rents once the near-term supply is absorbed. For now, midwestern cities were cited as the winners for 2024. They have the least new supply and a renewed focus on manufacturing could set these cities up to outperform. In general, the renter remains strong with wages growing faster than rents and consumer confidence ticking up.

3) Using tech to provide a better experience: Data makes everything work. Owners must aggregate, decipher, and implement strategies to use their data. The use of AI will only increase. It’s used now for chat/call bots, delinquency collection, and uncovering common tenant complaints. Standard tech like community Wi-Fi and smart building access are also important. These not only add value to the tenants but are ways of collecting data.

Case in point: According to Scott Wesson, SVP, Chief Digital Officer of UDR, resident satisfaction increased when their onsite staff was reduced by 42%. UDR believes its focus on data and speed provides a better tenant (customer) experience.

4) Operational and public policy risks:

  • Insurance costs – The largest owners are taking insurance in-house through self-insurance programs and creative partnerships. Having scale matters. Master policies from third-party managers can help smaller owners find cost-effective solutions.

  • Regulatory changes – The rent control discussion won’t go away and continues to spread. Rent control 2.0 is being marketed as “anti-gouging” with light just cause eviction policies.

  • Rising operating costs – Many large owners are now operating in centralized pods for maintenance and have found ways to make the assistant manager role a back-office position. 


Looking ahead: Like many, I was hoping to hear all the reasons why transaction activity would pick up in 2024. Instead, the latest buzzword—cautious optimism—tempered expectations. Dominating the sessions were topics on supply, rising costs, and regulations. And, distressed owners were hardly discussed as most believe this to be of minimal consequence. So, we all wait for transactions to increase. In the meantime, we continue to focus on the basics of our business and hope for interest rate certainty. 2024 appears to be shaping up as a year of transition.

⏪ Weekend Wrap-Up

  • Progress: Construction begins on Nashville's eagerly awaited 2.46 million-square-foot entertainment district, Nashville Yards.

  • Foreclosure: Greystar Real Estate Partners, the largest U.S. apartment manager, faces foreclosure on the Gabriella, a Dallas property, after taking a $127 million mortgage in 2022.

  • Discount: The 199-unit apartment building at 1411 S. Michigan Ave. in Chicago is facing an $80M foreclosure lawsuit, marking the city's largest multifamily foreclosure since 2022.

  • Multifamily defaults: Fitch Ratings is predicting apartment delinquencies for CMBS loans could reach $1.3B this year, surpassing losses during the height of the pandemic.

  • Rebound: Mortgage rates are expected to fall 5.5% by the end of the year, boosting optimism in the U.S. real estate market.

  • Expanding elevation: Two tenants filled the remaining space at the Elevation25 warehouse development in Mead, CO, expanding the campus to 1MSF.

  • Fundraising: CIP Real Estate secured $300M from Almanac Realty to expand its warehouse footprint, aiming to double its portfolio to $2.5B.

  • Cashing in: Declaration Partners, an investment firm backed by David Rubenstein, is raising $400M to invest in CRE amid falling property prices.

  • AI-driven: Pagewood, leveraging machine learning for real estate, acquires Houston's 152-unit Costa Mesa apartments.

  • Housing strategies: Despite external factors like rising costs and labor shortages, local strategies can effectively tackle housing deficits. Here are five.


Despite initial optimistic Census data suggesting only a 14% drop in multifamily starts in 2023, RealPage and other sources indicate a more significant 40%+ decline. Factors like high debt costs, lower property values, and economic uncertainty contribute to this downturn, with 84% of developers facing indefinite delays.

The AIA Architecture Billings Index confirms a consistent decline in multifamily work throughout 2023. Looking ahead, 80% of developers expect even fewer starts in 2024, signaling an end to the boom period of 2021-22 driven by cheap debt and high demand.

The future trend is expected to mirror the 1970s, with a high supply initially leading to more moderate levels, impacting both investors and policymakers.

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