JLL Makes Investment, Austin Grows: March Multifamily News Roundup

The Biggest March 2021 Real Estate News

We have summarized the three biggest multifamily and real estate stories to emerge in March of 2021. Broker JLL has made a big bet on institutional investors in the single-family space, Austin continues to experience an influx of new residents and investment, and CRE investors have a massive amount of capital to deploy before the year ends.

 JLL Makes Single-Family Rental Bet

JLL, one of the country’s largest real estate brokers and managers, has announced it will expand its focus on brokering single-family homes for institutional investors. JLL’s move into the space comes through a transaction with a smaller company, Roofstock. JLL has acquired a portion of the firm, which already focuses on selling single-family homes to investors. Roofstock will now provide that service to existing JLL clients and rely on a JLL software, Stessa, to manage their properties.

This vertical of the housing market became a focus for institutional investors after the financial crisis, when companies such as Invitation Homes bought thousands of homes at a discount across the country. Technological improvements have also made it easier to manage large portfolios of these homes, which in the past have mostly belonged to smaller, local firms.

Austin Continues to Grow During the Pandemic

Through the turbulence in real estate markets caused by the pandemic, a winner has emerged: Austin, Texas. The city’s future as a new Silicon Valley has doubters, but interest in the city and real estate deal volume have both increased. Due to relocating office workers and a strong job market, Austin has displaced Los Angeles as the country’s top city for real estate investment. Major employers have taken advantage of the business-friendly climate. Tesla now has a substantial presence in the city, and Oracle formally relocated its headquarters to the state capital last year.  Notable multifamily acquisitions in the Texas capital over the last few months include the Flatiron Domain purchase by New York-based Sterling Capital.

Other Sun Belt cities have benefited from relocations. Atlanta, Dallas, and Phoenix have received attention from investors, including Varde Partners and JPMorgan.

CRE Investors Have $250 Billion to Deploy

Last year, as tourists stopped visiting hotels and office tenants began working from home, predictions of widespread downturns abounded. Demand for office space has declined, and hotels have suffered, but widespread defaults and fire sales have been avoided outside the retail sector.

With asset prices resilient, investors have struggled to deploy capital. Limited opportunities cause investors to bid on the same set of available properties, meaning the pool of money will likely continue to increase. This situation differs from the 2009 crisis in that banks and lenders have offered forbearance and other aid to borrowers over the last year, options that were not made widely available to borrowers during the Recession. As vaccines enable the economy to reopen, many firms will have to settle for high valuations before a resurgence in traffic causes them to spike further.

Other headlines

  • Several companies, such as JPMorgan Chase & Co. and PricewaterhouseCoopers have reaffirmed their commitments to downsizing office space.
  • The number of homeowners interested in refinancing this year will likely decline as interest rates rise.

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