12/14/2012 | By Carisa Chappell
With all of the talk about positive multifamily fundamentals as of late, REIT CEOs in the apartment industry spoke with REIT.com about what they anticipate will be the dominant trend in the sector.
Ed Pettinella, president and CEO with Home Properties (NYSE: HME) said that the percentage of renters will increase especially as the numbers of immigrants that come to the country continue to grow. He said that demographic typically chooses to rent initially.
In addition he said the numbers of 18-24 year olds are increasing and they will also be looking to rent.
"The housing market is coming off of the bottom but it's not a robust period. You might have new starts totaling 700,000 or 800,000 but not near the levels where traditionally it's been a million and a half units per year," he said, adding that underwriting standards are still stringent for would be home buyers.
"We now have an economy that continues to grow, what is each individual's company exposure along those lines of business? I think investors are going to try to pick through that aspect," he said. "And I think we're very well positioned for that run."
He said that investors will see that the multifamily sector will continue to do well when the housing market starts to recover.
"I think the theme will be in spite of a slowing growth rate, the growth in multifamily incomes and cash flows is going to probably be best in the REIT sector," he said.
"2013 is likely to be very competitive. I think the economy will be choppy as people work through the government funding problems, there will be an emerging of new supply that affects pricing at the high end of the price lines, but for us, we're primarily a B and B+ portfolio, I think we'll do fine," he said.