HFO Quarterly Newsletter Update | Q2 2024

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2023-2024 Newsletter Updates: Year-End 2023 | 2024 Q1 | 2024 Q2

HFO Investment Real Estate Marks 25 Years with Key Executive Hire, Tiffany Wright as COO

Drawn by HFO’s industry leadership, Tiffany Wright brings extensive real estate and operational expertise to her new role

PORTLAND, OR, April 29, 2024 – Marking its 25th anniversary with a significant step towards future growth, HFO Investment Real Estate, a Pacific Northwest-based real estate brokerage specializing in multifamily real estate, is excited to announce the appointment of Tiffany Wright as Chief Operations Officer. This strategic addition underscores the firm's commitment to expanding its leadership and enhancing its service in the multifamily real estate sector.

Tiffany Wright reflects on her appointment, "Joining HFO was influenced by the firm’s reputation for top talent and leadership in the industry. I am thrilled to help drive growth at a company that values robust relationships and innovative solutions. The alignment of HFO’s commitment to excellence with my professional goals and values presents a compelling pathway to contribute meaningfully."

Bringing a wealth of experience from her tenure as President of CPX, a commercial real estate investment firm covering Portland and Seattle (now a part of Northmarq), Tiffany is well-prepared to spearhead operational enhancements and elevate HFO's service standards. Her prior leadership over a diverse portfolio including commercial, multifamily, and manufactured housing assets positions her to lead HFO into a new era of industry prominence, and her transition to HFO from a successful career spanning early childhood education to executive roles across the Western United States and India highlights her versatile leadership and deep commitment to fostering lasting relationships.

As HFO celebrates a quarter-century of success, Tiffany Wright’s role will be pivotal in steering the company through its next phases of growth and achievement. Her unique perspective and strategic insight are expected to play a crucial role in maintaining and expanding HFO's position at the forefront of the Pacific Northwest apartment brokerage industry.

For more information about HFO’s services and career opportunities, please visit HFORE.com.

About HFO Investment Real Estate

HFO Investment Real Estate is a Pacific Northwest-based real estate brokerage specializing in facilitating the acquisition and disposition of multifamily assets on behalf of a wide range of clients, from individual owners to institutional and private equity firms. HFO was founded in 1999 and has since earned a dominant share of the local market, consistently outranking its peers as a top broker in our PNW markets. In 2022, HFO joined several other brokerages throughout the U.S. to form GREA, a network of top-producing brokerages dedicated to providing a higher level of service and reliable high-level expertise to multifamily investors in every region.   

For more information or to learn more about available listings, please visit HFORE.com. 

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Media Contact: Julie Eng
julie@hfore.com
503-241-5541

Sold! 18 Units in Newport, OR

Brookshire Apartments is an 18-unit complex comprising four four-plexes and an original 1950s house converted into a duplex. Tucked away in Newport on the Oregon coast, the benefits of the property's desirable location were challenged by the need for various capital improvements, and several vacant units were not yet rent-ready. With occupancy below 70% at the time of sale, there was potential for management improvement. HFO assisted the buyer in navigating the complexities of financing for this operationally challenged property in a tertiary location. This transaction exemplifies HFO's adeptness and expertise in successfully closing challenging deals. 

2024 Multifamily Housing Market: A Year of Cautious Optimism and Stabilization

By HFO Investment Real Estate Research

 

Following partner meetings with dozens of institutional multifamily owner groups at the National Multifamily Housing Conference in San Diego last month, it appears the multifamily housing sector is entering a period of cautious optimism in 2024. For the most part, institutional owners, whose multifamily assets are typically valued at $20 million and up, feel the prices of multifamily real estate are finding their floor. Key factors contributing to this outlook include better clarity on interest rates, operational costs, and the balance between supply and demand, suggesting a more predictable market landscape. There's also a growing acceptance that distress among institutional-grade properties will be minimal, with many issues likely to be resolved privately or through debt restructuring.

 

The financial dynamics of multifamily properties are evolving. Expense growth is expected to surpass revenue increases in some markets this year. Property values are approaching a low-water mark, with capitalization rates stabilizing. These dynamics suggest a cautious market, with big-ticket investors adjusting their expectations. The cautious market is expected to keep joint venture and institutional equity mostly sidelined, with the bulk of capital investment in housing this year coming from family offices and private individuals. A surprising and significant increase in expenses the rental housing market faces is a surge in fraudulent rental applications. According to an NMHC report released in mid-January, more than 70% of major apartment landlords report increased applications, highlighting a growing and significant issue impacting operational costs and market integrity. This trend complicates rental management and contributes to higher costs, ultimately affecting availability and affordability.

 

With loan rates and expenses up, construction starts are declining nationwide, including throughout the Portland metro. Most of the area's new apartments will be delivered this year, and there is very little slated for completion in 2025 compared to other markets in the western region. This decline in new construction is occurring despite a critical need for more housing. A strong job market, increasing wages, and growing consumer confidence further increase demand. With completions up in the near term, the strategy of "heads on beds" emphasizing occupancy over rent increases still reflects the competitive landscape, with operators willing to adjust prices to maintain high occupancy rates. However, that strategy will end as construction deliveries slow later this year. CoStar Analytics is now forecasting that rent increases will begin again in the fourth quarter of 2024.

 

The government at all levels now appears serious about addressing the need for additional housing. Last week, the City of Portland issued largely temporary "regulatory relief" on 15 zoning and permitting requirements that take effect March 1. At the state level, Governor Tina Kotek recently announced she would seek $500 million during the current legislative session for housing-related infrastructure and land-use expansions.  At the federal level, a new bill introduced in Congress on January 31 would spend $300 million to enhance the supply of affordable housing.

In summary, the multifamily housing market in 2024 is navigating through a phase of adjustment and cautious optimism. Demand remains strong, but the challenges of supply, construction, and operational dynamics persist. The introduction of legislation to bolster the affordable housing supply and the need to address fraud in rental applications are critical aspects of the broader effort to stabilize and improve the market for renters and investors.

HFO Investment Real Estate is celebrating its 25^th year in business. HFO offers brokerage and advisory services to multifamily owners in Oregon and Washington. Call (503) 241-5541 or visit www.hfore.com to learn more.