Would you rather have the best vacancy in the worst market, or the worst vacancy in the best market?
Such a choice was offered during a panel on submarkets during the NMHC Apartment Strategies Conference in La Quinta, Calif., in January. Hessam Nadji, Managing Director of Institutional Property Advisors (a Marcus & Millichap Company) discussed the pros and cons with a panel of four multifamily housing executives.
Institutional Property Advisors ranked 846 apartment submarkets across 46 metros based on 2010 vacancy rates.
“We’re much more efficient as an industry when it comes to operations now than we were 15 years ago, but when you can find inefficiencies within markets, you can create opportunities,” says Greg Pinkalla, COO, Fairfield Residential.
Having on-the-ground knowledge about submarkets is critical, says Rick Graf, President, Pinnacle. “It could have to do with something such as school-district boundaries, which can sway a neighborhood’s value significantly over just a block or two,” Graf says.