Insights from Experts: St. Louis Apartment Market Update

7/13/2016
Tags:

​Ryan Carlie, Real Estate Manager
Years with Opus: 2
Project Credits: Clayton North Central Luxury Apartments, Central West End Luxury Apartments & District Flats
Event Name: St. Louis Commercial Real Estate Summit, 2nd Annual Winter Classic
Host: Midwest Real Estate News

Key Points:

Q. Are you a net seller or net buyer in the market?
A. There is value on both ends. We invest our own capital along with our equity partner.

Q. Cap rates? Up, down, stay the same?
A. We’ll see a modest Increase in the interest and cap rates to hold. Institutional investors will continue to acquire stable multifamily assets in the region and chase deals, likely create a competitive environment.

Q. Why Build? Why Buy?
A. We create value for our clients because we handle everything in house.

Q. What are your trade secrets for the brightest opportunity for development here in STL?
A. Based on our current developments and around country, we’re interested in urban core markets, right product in right location. In addition to Clayton and CWE, we are interested in Chesterfield. Lots of businesses in the area like RGA, Monsanto and MiTech, and no product development in the area in 30+ years. Out of St. Louis, we’re looking for opportunities in Kansas City and Columbia. We search for cities with high demand for rental properties.

Q. Is the construction pipeline in multifamily getting over built?
A. There has been pent up demand in this market. The home ownership percentage has gone from 67% to 63%, proving the trend toward renting. Absorption is high and vacancy is low, so we are very confident units will all be absorbed here in this market as well.

Q. What are the new cutting edge design features in developments now that are game changing with future deals?
A. Our renters are millennials to empty nesters. We’re focused on location and lifestyle living where residents can live, work and play. Our interiors offer various amenities like state-of-the-art fitness, club rooms with TV, full kitchens and terraces and patios for entertaining. Our student housing isn’t that much different than our market rate apartments, we offer tanning beds, full theatre rooms with gaming systems and fully furnished with double occupancy rental options, so students have the financial opportunity to bunk up with other people so that they can live in the fun environment and take advantage of the many amenities, including a walkability to campus.

Q. How much more time does multifamily have?
A. Multifamily is still in growth mode. It’s been successful and well received. We will continue to keep an eye on supply and demand. I believe we are in the 3rd or 4th inning in comparison to a baseball game.