There’s still room for the multifamily sector to grow in the Sun Belt region, according to Eric Bolton, chairman and CEO of Memphis-based REIT MAA (NYSE: MAA).
“Fundamentals are terrific. We continue to see very high traffic levels, and rent levels are higher than we’ve seen historically,” he told REIT.com in a video interview at REITWeek 2012: NAREIT’s Investor Forum. “We continue to feel very good about the business and really think for the next several quarters, the runway is wide open.”
Bolton added that a consistent upswing in rents will be one of the main drivers for growth in the second half of 2012. The multifamily company also has renovation projects underway that Bolton said will “turbocharge growth.”
“So, out of our existing portfolio, it really just comes down to rent and the upside that we continue to see achievable in that regard,” he said. “As far as new growth and external growth, we have got about $150 million in the development pipeline at the moment, and we’re looking at a couple of other development opportunities that we may get started on late this year or early next year.”
While the company is tackling new developments, Bolton pointed out that the primary strategy for the company historically is built around being active acquirers of apartment communities. However, he added that the marketplace has been challenging for acquisitions.
“The environment has been competitive for the first half of the year, but we’re hopeful that over the back half of the year and as we get closet to year end, our success rate on getting properties acquired gets a little better,” Bolton said.
When it comes to attracting new residents, Bolton said location matters. He added that the community’s proximity to employment centers is important.
“In the Southeastern markets, we find that a lot of these employment centers are out away from some of the downtown core urban areas,” he said. “Now we do have some properties in those areas, but in many cases we are also out near some of the employment centers, where we have suburban office-type sets-ups in place.”