Our lead asset manager Iven attended the IMN Conference in Florida January 22nd, where he was able to
highlight specific points for the development of Anthem Capital’s information management, as we are
always looking to keep to date with the technology that facilitates processes for both our clients and us.
IMN is a terrific conference to connect with seasoned apartment operators. The corporate knowledge
and experience available at the conference was outstanding!
Here are some of the interesting items he learned at the IMN conference:
- Operators with vertically integrated operations are overcoming the current supply chain and labor
shortages the best when compared to non-vertically integrated operators. These organizations can
control the entire process beginning to end with aligned interests all around.
- Ask yourself what systems do you have in place now that improve operational controls, to help
insulate you from a market down turn. It’s easy to appear as an apartment investing genius in a
‘rising tide’ environment, but how prepared are you for when the tide goes out? Now is the time,
more than ever, to be thinking about implementing/operational systems.
- Although inflation has increased, the rising rent rates in the HOT markets is able to absorb the
material/labor cost increases. Directionally- this makes sense, but what happens when inflation
increase percentages begin to exceed rent growth percentages? make sure to track and understand
this correlation correctly.
- Given where we are in the current cycle, it is important to take the time to stress test your entire
portfolio and assess if any measures should be implemented now to offset market risks such as:
increases in interest and cap rates, increases in OpEx, and lower rent growth than originally assumed.
- All 3rd party reports are taking longer than expected. Make sure your debt team is lead turning the
report orders to prevent a closing delay.
- Yes, interest rates are most likely increasing in the coming months- but you need to also
understand how the spread in rates are adjusting as well. Not always a 1-for-1 correlation.
- Typically, there are 30 to 40 offers on every deal in HOT markets and this is the expectation for
future deals- at least for the foreseeable future this year. This tracked metric goes to show how HOT
the market is and how much liquidity is in the market chasing deals.
- Crowdfunding platforms are making it easier and easier for the common investor to enter into the
market, thereby increasing liquidity flow as well.
- A lot of the local Florida brokers are losing listing agreements to off market buyer solicitations.
More and more buyers are bypassing brokers and making offers direct to the seller. However, this is
not a strategy we practice.
Then, after the IMN conference in Miami, Iven toured all of the Tampa market to understand the
ground reality exuberance at large. This was a very eye-opening experience to say the least!
Here are some items about the Tampa markets:
- As a strategy, investors are intentionally overpaying for assets (more than ever before) as they
know the price per door will go up while in escrow. In one case, a broker shared a story in how the
price went up by $10K per door over a 60-day acquisition period.
- The organic rent growth is alive and well. In some cases, you may be able to lower your CapEx
budget, for cleaner assets, while very little interior improvement is needed to drive rent growth.
- Tampa is extremely under supplied and the local population is very resistant to new development-
adding to the extreme rent growth.
- Tampa has always been primed to appreciate in value at astronomical levels, but the Covid crises
has accelerated the timeline as more and more northerners are moving to Tampa.
- The 25%+ YOY rent growth is real as I witnessed it with my own eyes studying what property
management companies are able to realize at the ground level.
- Deals are won after you really take the time to breakdown the per year cash flows to a monthly
basis, to truly understand how you can burn off loss-to-lease on per month basis, while taking into
account the current rent growth percentages.
- Many opportunities are driven just by burning off loss-to-lease vs driven by implementing a
massive capital improvement plan. You need evaluate the opportunity cost in comparing the two
value add plans- especially in the Tampa market. In some cases, this makes for a much simpler value
add business plan, as less rehab is needed, thereby lowering execution risk, yet hitting the projected
Anthem Capital is consistently working to improve and streamline their operations to ultimately help
ensure that everything goes smoothly for all of their clients.
This has included adding new members to the team, restructuring how they move forward with different
projects, and even implementing operationally sound systems in certain areas.
The company wants its leadership team to focus more on the bottom line than on long-term individual
client needs. This means making tough decisions about how to maximize revenue while offering.
We are extremely excited about the Florida market and is setting up an in-place structure today, to
pursue apartment investment opportunities in Tampa and the surrounding markets️.
Stay tuned for a future Florida opportunity to come!
If you would like to learn more about Anthem Capital or the Florida market, don’t hesitate to set up a
call with us here: