Conor Wagner, an analyst at Green Street Advisors, joined REIT.com for a video interview at REITWeek 2017: NAREIT’s Investor Forum at the New York Hilton Midtown.
Wagner, an analyst with Green Street’s residential research team, said he does not expect a material slowdown in supply growth in 2018 for the apartment sector. Housing starts have not shown any notable deceleration, he pointed out.
Meanwhile, the economics of development still look attractive enough for projects to get started, according to Wagner. Although the outlook is not as positive as a year or two ago, developers can still underwrite 25 to 30 percent profit margins, he noted.
On the demand side, activity has slowed in line with more muted job growth, Wagner observed.
Wagner also said transaction activity has slowed year-to-date, although there has been no sign of distressed activity. The slowdown is partly because “buyers and sellers haven’t come to grips with the new operating environment we’re in,” he noted.