With the housing market under pressure due to the COVID-19 pandemic, prices for single family homes have skyrocketed to overwhelming costs. With minimal inventory of homes on the market, a bidding war unfortunately ensues when properties do become available. This drives the cost of homes even further up in price. Paradyme long ago forecasted this shift coming and decided the best move for our investors was to continue to offer multifamily investment opportunities. Real estate is an asset class that most all investors diversify with when constructing their portfolio.
According to CBRE, as stated in the “2021 Global Investment Volume Hits Record Level” article, “Global commercial real estate investment reached a record annual total of $1.3 trillion in 2021. This is up by 55% from 2020 and up 21% from 2019. The multifamily sector has had a 90% increase year-over-year, which has contributed to the volume growth in Quarter 4. Multifamily has attracted much more capital than the other investment sectors; Industrial, Office, Hotel, and Retail.”
These statistics confirmed that Paradyme is correct in the assessment of our data analysis and is currently moving in the right direction with our investment strategies. Between the uncertainty brought on by the pandemic and rising inflation, Paradyme knew that the heavy shift to continue the pursuit of multifamily would be a strong decision, with a stable asset class. This was proven with the recent closing and payout of Paradyme’s Parkview Multifamily Offering – a Denver-based 45-unit townhome project, and the close out of Pine Street Multifamily – a 21-unit apartment project located in the booming city of San Antonio. With support from data and market trends, Paradyme is motivated to move forward with a new multifamily project located in Nashville, TN and is currently reviewing several multifamily projects within the Nashville and surrounding cities.
Rendering of Pine Street Multifamily in San Antonio, Texas
The National Multifamily Index (NMI) currently ranks 46 major real estate markets. Marcus & Millichap explains the NMI in the “2022 Multifamily-National Investment Forecast” as “a collection of 12-month, forward-looking economic indicators and supply-and-demand variables. Markets are ranked based on their cumulative weighted average scores and various indicators, including projected job growth, vacancy, construction, housing affordability, rents, historical price appreciation and cap rate trends.”
The NMI ranked Denver, CO (Parkview) and San Antonio, TX (Pine Street) above average on the NMI, as these cities are categorized as cities that sustained momentum during the pandemic. This shows that Paradyme forecasted favorably with its investment project choices and their locations. Furthermore, Nashville, TN is also ranked highly on the NMI and is leading in the recovery after the pandemics initial shock.
During the National Multifamily Housing Council’s Strategies Conference, John Chang, Senior Vice President and Director of Research Services, stated in a recent article that “2022 will be an exceptionally active investment year, especially for the large apartment market. I can’t tell you how many times investors told me they had hundreds of millions of dollars ready to deploy”.
With that being said, Paradyme is looking forward to another year of investment growth going into 2022, with multifamily leading the investment opportunities that will be featured on their investment platform for both accredited and non-accredited investors.
Websites to Cite:
- CBRE. (2022). 2021 Global Investment Volume Hits Record Level. https://www.cbre.com/insights/briefs/2021-global-investment-volume-hits-record-level?utm_source=linkedin&utm_medium=social&utm_term=c20a00d2-a4a7-42a1-bae4-263f304cdf04
- Marcus & Millichap. (2022). 2022 Multifamily National Investment Forecast. http://www.thomasmultifamily.com/pdf/2022%20US%20Multifamily%20Forecast.pdf
- Sherman, E. (2022, January 28). This will be an ‘Exceptionally’ Active Investment Year for Multifamily. Globest. https://www.globest.com/2022/01/28/this-will-be-an-exceptionally-active-investment-year-for-multifamily/