NorthMarq has added a multifamily investment sales team to its Charlotte and Raleigh, N.C., offices. The new team, which consists of Andrea Howard, Jeff Glenn, John Currin, Allan Lynch and Caylor Mark, all formerly of JLL, brings NorthMarq’s investment sales locations to 18.
This addition also allows NorthMarq to expand its visibility, Carolinas coverage and service offerings to clients as the firm sets its sights on high-growth markets. Trevor Koskovich, NorthMarq’s president of investment sales, sat down with Finance Insight to discuss the multifamily investment sales market and his new five-person team.
Finance Insight: What does this new team and location add to the NorthMarq platform and breadth of services?
Koskovich: The new Raleigh and Charlotte locations allow NorthMarq to be in lower-regulation, high-growth U.S. regions. From an investment sales perspective, we’re really targeting high-growth markets for population movement and investment sales transaction volume. Raleigh and Charlotte continue to be part of this conversation, and we’re super excited about our new team’s ability to service those markets.
This new team will help us drive more business through the Southeast and in overlapping markets, including Nashville, Chattanooga and north Florida. These team members are an integral part of our growth platform, and they allow NorthMarq to be much more competitive in equity offerings in those markets. We’re big originators of real estate equity and structured finance, and I feel like this team will make us that much more competitive, both locally and nationally.
FI: Why is NorthMarq expanding its investment sales platform?
Koskovich: We recognize there are a lot of things that come with the expansion of investment sales. This includes visibility in the marketplace, which is really important when you’re a mortgage bank exclusively in structured financing. Another facet is that the transaction side of the business works in great partnership with the structured finance team.
NorthMarq can now sell, finance and provide equity on properties through our full real estate vertical integration. We are a direct seller servicer for Fannie Mae and Freddie Mac, and have the most life insurance correspondent relationships, giving our clients more options for the right financing structure. We also service our own loans, so we’re looking to build that platform and expand that aspect of the business. From a synergy standpoint, it makes a lot of sense to develop in those capacities.
FI: How does this new team work with the NorthMarq debt and equity professionals?
Koskovich: The debt and equity team has been robust for quite some time. We will integrate this new team and use those folks to make financing options that go along with the sales, to take a property to market and to be there side by side with the client so we ensure they know all their financing and equity options with any given offering.
This investment sales team will work with the vertically integrated team to offer clients the deepest options, share information and enhance their market knowledge. Collaboration will allow our investment sales people to get more comfortable with where debt and equity is and be more articulate and more capable in their tools as they acquire more business for the firm. They should view the debt and equity team as a resource.
FI: How has the multifamily investment market changed over the past year?
Koskovich: With COVID, we saw a dramatic pullback. However, within these high-growth markets where we’ve seen a dramatic shift in population, the multifamily industry has really grown quite rapidly. There has been a shift from urban cores with draconian lockdown rules like New York, San Francisco and Seattle into markets like Charlotte, Dallas and Salt Lake City. These multifamily markets are experiencing consistent yield growth, and often rent growth.
The availability of financing in these markets also makes them very investable. COVID only exasperated the momentum shift that was already occurring. It proves people want to be in these markets and in these projects. It also seems that we’re going to continue to see an economic acceleration on all levels, which, in theory, should mean even more investable dollars moving into the multifamily space.
FI: What products and regions are most in demand for investors?
Koskovich: I think it’s fair to say most investment dollars today continue to be in the “smile” of America — meaning the Sunbelt — with the exception of the West Coast. Money is leaving California as fast as it possibly can, while Washington and Oregon aren’t seeing as much investable action. On the other hand, Boise, Salt Lake City, Phoenix, Denver, Dallas, Atlanta, the Carolinas, Nashville and all of Texas and Florida are seeing the most investment activity.
This activity is predominantly workforce housing, or B-quality apartments. High rises in downtowns definitely aren’t going to do as well from a monetizing standpoint, but if you look at where people are entering, not exiting, workforce housing and traditional garden-style communities are attractive.
The build-to-rent trend is in its infancy, but the market is also gravitating toward that, particularly because of COVID. Single-family and horizontal apartment types offer less density and fewer touchpoints by outsiders. I think we’re going to see an explosion in the next three to five years. People want more space, especially with so many now working from home. It’s fair to say most people would rather be in a single-family home than in a studio apartment in a high rise downtown. This trend is here to stay, and it’s only going to get larger.
— Interview by Nellie Day. This article is posted as part of REBusinessOnline’s Finance Insight series. Click here to subscribe to the Finance Insight newsletter, a four-part newsletter series, followed by several video interviews delivered to your inbox in March 2021.