Apartment development is back—at least for one large apartment REIT. AvalonBay expects to start $500 million in new construction in 2010, according to Bryce Blair, CEO for the Arlington, Va.-based REIT.
“Demographics are working in our favor, and there will be a change in the forces that have pushed homeownership so high in the past,” Blair said at a Real Estate Summit held at Georgetown University’s McDonough School of Business April 28.
Speaking on a CEO panel that included executives from several types of commercial real estate companies, Blair said public real estate companies like AvalonBay will hold a significant competitive advantage in development because credit for new construction is hard to come by.
“We have the balance sheet to pull off new construction,” he said. “Most private developers cannot bring the equity to bear to get a construction loan. If you believe the future will require more equity and not less, it’s good to be public.” – NAA’s Jeffrey Lee