Ed Pettinella, president and CEO of Home Properties Inc. (NYSE: HME), joined REIT.com for a CEO Spotlight video interview at NAREIT’s 2015 Washington Leadership Forum.
Pettinella speculated that the apartment market in Washington, D.C., would start to recover in the second half of 2015. He noted that job growth is returning in the area following a period of government spending cuts. Additionally, the supply of apartment units in the region is expected to peak this year.
“With more jobs coming downstream, low [interest] rates, low inflation, we expect better results in the second half of ’15 and into” 2016, Pettinella said.
Regarding the potential for acquisitions, Pettinella pointed out that unique markets are presenting acquisition opportunities. They include northern New Jersey, Boston, Chicago and Philadelphia. He said Home Properties would focus on those four markets for potential deals in the near term.
Lastly, Pettinella addressed the speculation among some market observers that the apartment market will start softening. He noted that the multifamily sector went up nearly 40 percent in 2014. Even though he doesn’t expect that level of performance to continue, the sector can achieve total returns of roughly 15 percent, according to Pettinella. Importantly, the national economy appears to be at its strongest point since the financial crisis, according to Pettinella.
“I think this could be a very good year—2015 could surprise some people,” Pettinella said.