|
SHB:What are you spending most of your time on right now?
Alex Candia & Craig Zogby: As a team we’re underwriting a large volume of projects across student and conventional multifamily. We have a lot of tools in our bag to make strategic investments up-and-down the capital stack. As always, we are looking at every opportunity and asking how we could best fit into the structure to add the most value. Sometimes that’s a pure acquisition, sometimes its utilizing our debt fund to replace existing debt financing or supplementing it. We have also been very active with development and that continues still. These times call for creative and thoughtful approaches to solve the problems that are faced on both sides of a transaction.
Operationally, we’re tracking university fall-opening announcements as well as supporting our on-site team members in their "contactless" move-ins, the re-opening of leasing spaces with new protocols, and a continual adjustment of marketing strategies to stay on student and parent radars. We are very lucky to have had strong leadership at our management companies that helped us navigate this crazy time. Leasing has been strong, and luckily everyone has maintained their health and focus.
2. SHB: Are any transactions still moving forward? If so, how do you make that happen?
Alex Candia & Craig Zogby: We have strong relationships and have been in business for over a decade, so we have track records with partners that we can rely on. Having developed that short-hand communication with great partners makes transactions possible in these times. Land values and construction costs have been variable through this crisis, so we’re working to lock in those pieces so we can continue to move the ball forward. Our partners’ swiftness and ability to change common area plans or even unit layouts to accommodate a "new normal" has been inspiring to see. We are still very confident in the student housing sector and continue to underwrite and execute projects with enthusiasm. There is no question that in order to secure debt, perform due diligence, and close transactions you have to have some heavy horsepower in order to pull projects and players to the finish line. We’re proud of the reputation we have built amongst lenders and partners. To be able to leverage those relationships for the collective good is exciting.
3. SHB: What will it take for the investment and development markets to "snap back" once we are through the worst of this situation?
Alex Candia & Craig Zogby: Late last year and into Q1 of 2020, we still saw what we viewed as a frothy market. We don’t know, nor does anyone, how long it will be before we return to the exuberant levels seen in the past few years, but we anticipate continued strength in the sector moving forward and we look forward to the start of school in fall. We anticipate we will have to be nimble and adaptable, but seeing how quickly and thoughtfully our teams responded in March, we feel we have the right mix of talented individuals in place to take on challenges. Schools opening is the first step, and it seems like most institutions are heading in that direction. The next hurdle, which many seem to be ignoring, is going to be the credit markets coming back online in earnest. With limited liquidity in the lending business, it will be slow to snap back.
4. SHB: What is your advice to owners, operators, investors, and developers in the marketplace?
Alex Candia & Craig Zogby: We always preach fundamentals, and this is an opportunity to return to core values across investing and operations. If, as an industry, we can take anything away from the current crisis, it is to zero in on the fundamentals and attempt to be flawless in our execution. We have been paying a lot of attention to our basis in deals and always underwriting what we believe are achievable rents and expenses. Simply assuming a property will get more in rent than last year or that a new development will capture more rent than the competing property delivered the year before is a strategy that has an invisible edge.
5. SHB: And on a personal level, what is the one thing you most look forward to doing once we get past this pandemic and life/society get back to "normal?"
Alex Candia: An incredible silver lining to this crisis has been the amount of time I’ve been able to spend with my family. That, of course, has not been without its challenges! I do look forward to my kids returning to school and having some standard routine back for their sanity and my own! Aside from that, I’d really like a good cup of coffee made by a professional in a ceramic cup that I can sip quietly. Emphasis on quietly.
Craig Zogby: I have enjoyed reimagining the work day and truly balancing my family and being effective during working hours. As a company I think we all have been pleasantly surprised how well we have been communicating and getting it all done. That said, closing the door while listening to my six-year-old on her Zoom class and my three-year-old literally screaming and chasing my wife around demanding ice cream at 10 am has been surreal. But, like so many of the conversations working moms and dads have with other working moms and dads, we are all living the same dream. Sometimes it’s a nightmare; sometimes it’s bliss.
|
