New Reality for NY multifamily market

Buying or Selling in 2020?  Be prepared...

Given all the uncertainty present today…changing rent regulations, upcoming elections, stock market volatility and now the COVID-19 Pandemic, I believe we are entering a new phase in the commercial real estate market…one filled with unique challenges and opportunities!

As the 1st Quarter of 2020 draws down, the market is rapidly evolving, and right now it’s difficult to predict how the rest of the year will play-out, but I think both buyers and sellers need to prepare themselves for a new reality.

If you are looking to be a Buyer in this new market, here are few steps to help you prepare:

1.       Stack up your cash- liquidity will be crucial.  In such a low interest rate environment, it’s an ideal time to refinance your current properties and prepare to acquire below market assets.

2.       Determine your investment time horizon and commit to it. Decide if you will be holding your building acquisition for 1 year, 5+ years, or somewhere in between… This will help you focus on sourcing the appropriate opportunities and set the right expectation with your investors.

3.       Reach out to your network of professionals (especially brokers) and let them know you are currently looking to acquire.  Be sure that the broker specializes in the assets you are looking to acquire and can source you the right opportunities. 

If you are looking to be a Seller in this market, you will need the following to prepare:

1.       Evaluate your entire real estate portfolio to determine how you can maximize and reposition it.  Decide which buildings are in a position to be sold in this market.  It’s a very volatile market right now and not every deal can be well positioned for a sale right now.

2.       Get a Broker Opinion of Value from a broker that understands the current multifamily market.  Initial pricing from the start is very crucial to a successful sale. 

3.       Prepare all the proper paperwork. In this increasingly tightening regulatory environment, buyers will be carefully reviewing your rent rolls, DHCR records, and the related backup documentations.  It’s imperative you get ahead of this.

NY Multifamily is very dynamic – whether you are buying or selling, be sure to work with an experienced broker who understands the market.