December 28, 2021
In retrospect, the only surprise about the resilience of the multifamily sector during the trials of the past two years is that anyone was surprised.
In fact, the market is arguably hotter now than it’s ever been—we’ve had persistent growth in appreciation and pricing power for sellers, in part because interest rates reached a low plateau (they’ve gradually risen since). Buyers haven’t done too badly either—from what we’ve seen, actual performance after acquisition has routinely beaten the proforma, and even outperformed when compared to proforma assumptions prior to acquisition. Demand and interest have both grown over time, and barring normal fluctuations, there’s no sign of even a slowdown.
And while the market booms, there’s good news at our home base too.
At Offerd, we’ve said since long before the pandemic that the foundation for multifamily investments has been and will continue to be very strong for at least the next decade. That fuels our own operating philosophy and business growth.
We occasionally offer updates on our initiatives to shape the market. For example, earlier this year we talked about sourcing nearly $700 million worth of off-market multifamily acquisition opportunities—all meticulously selected to meet specific target parameters—during just one week early in the summer. We focused on one investor that specializes in acquiring multifamily assets that are underperforming and off-market, and in less than 60 days identified the perfect target asset; the deal closed in another 90 days. More recently, we discussed our role in the capital stack during investment initiatives.
We’re happy to say it’s been like that all year. Our core advantages are as strong as ever: Offerd tracks 90,000 ‘off-market’ assets around the country, with algorithms that encompass occupancy rates, demographic shifts, neighborhood incomes, population forecasts, educational levels and more, some 10,000 different categories in all. That’s how we find the best multifamily properties to match buyer and seller, and it all happens fast. We've built a machine—the perfect blend of best-in-class technology, data and people—and it works. Our partners come to us with their criteria, and we get deals done. And as we all know, deals lead to more deals. Now multiply that by two dozen partners and growing. . .
More importantly, we’ve pioneered and advocated forcefully for Acquisitions as a Service. At a time when every investor seeks a competitive edge—finding the best assets, off-market or otherwise, in the shortest time and with the least effort—we believe that partnering with a firm specializing in this very practice is the best way to go. By the way, we’re the only firm doing it. We even have an ebook dedicated to the subject. Try it: We promise it’s a quick, fun and informative read.
And if all that’s the present, the future looks to be even more dynamic. The Offerd partner roster has grown significantly in the past few months, and there are more coming in regularly. We’ve met our goal of $150 million in acquisitions, and we’re ready to scale beyond $500 million in the year ahead. We’re rolling out new technology that strengthens our value proposition, with more information that’s easier to access, and streamlined and enhanced our product/service offerings and pricing. We’ve boosted our team of talented professionals with more industry veterans and innovators, including a president of acquisitions and president of investments. We have more than 20 executives in-house, and we’re looking for more—come join us.
In the big picture, getting away from the problems of the recent past doesn’t mean we won’t face challenges ahead. For example, rates won’t stay as low they are now forever—we’re going to see gradual increases at some point (remember, it’s all cyclical). However, don't expect negotiating power to automatically shift from the seller to the buyer. Supply is perpetually constrained, while demand keeps growing. If this is still a niche investment, that niche is growing rapidly as more sophisticated investors learn of the potential.
We’re here for all of it. Our goal at Offerd is to be the singular standard for CRE acquisitions. We currently lead the market in technology, service, experience and expertise, even as the market keeps growing. We want to become the largest acquirer across all major CRE asset classes in the US by transaction volume. It won’t happen overnight, but it will happen.