I’ve attached an article about the great year that multifamily giant Equity Residential had in 2010. For those more focused on the Portland scene, Equity closed on half a billion dollars of Class A assets in Jamuary 2101. Some of the deal were market transactions not bottom fishing expedititions. This was the first sign that in some markets fundamentals were starting to improve. When you see Sam Zell spending money…and I mean big money…it makes you start to think that someday soon the sun may shine again.
Multifamily prices are down from the heady 4 and 5 Cap days of just a few years ago…and some cities have fundamentals that support jumping back in. One of the largest brokerage houses also has an extensive market research dibvision. They are predicting a 4.3% jump in Economic Rents in Portland for 2011. Another key player, Integra Realty Resources predicts a double digit rise in multifamily values in Portland of the the next two years.
Brandishing deep pockets, a well-known mogul, and a penchant for high-barrier markets, Equity Residential made buying units in 2010 look like child’s play. And if the REIT has its way, the industry should expect more of the same in 2011.
By:Les ShaverRelated ArticlesSave / Share
Credit: Tim Klein/AuroraIt is possible to step inside the offices at Two North Riverside Plaza in Chicago, listen to Equity Residential president and CEO David Neithercut and vice president of acquisitions and dispositions Alan George talk about their 2010 deal flow, and never once hear the name Sam Zell. Indeed, Neithercut and his team have gained the confidence of Wall Street over the past five years. Despite this, Zell’s shadow still looms large.
Take Equity’s $475 million acquisition of three of New York developer Harry
Macklowe’s assets last January. While the deal had been shopped to a number of people in a number of different forms, one call from Macklowe to Zell is what really got the ball rolling. “By working with Sam Zell, our presence is everywhere,” Neithercut says. “If we wanted to buy deals in Ecuador right now, we could.”
Equity, the third-largest owner on the 2010 Multifamily Executive Top 50 list with 137,007 units, didn’t need to go to Ecuador in 2010 to close 16 apartment deals (plus six land deals), making it the largest apartment buyer in the industry last year. Indeed, Equity scooped up more than $1.4 billion of assets from San Diego to New York in 2010. [See “Trophy Assets”]
Of course, helpful to that achievement is the presence of Zell, who, along with Neithercut, George (called a “tireless buyer” who “knows his markets cold” by one competitor), and two board members, sits on an investment committee that signs off on all deals. But the real story behind Equity’s dealmaking success in 2010 is deeply ingrained, highly experienced teams in acquisitions, finance, and even operations, all of which allow the company to recognize market improvements before others in the industry do—and then capitalize on it.