Hello, everybody. My name is J Swank, and I'm the host of "The Capital Stack" by Yardi. We like to take a practical view on how software can and is helping investment managers, owners, and investors grow their portfolio. Today, I had the luxury of sitting down with my friend and colleague, Jeff Adler, who heads up our Yardi Matrix and research department here at Yardi and is our in-house economist. Jeff and I sat down and talked about the current state of multifamily, as well as some thoughts on where things are going, where there are potential risks ahead, or opportunities for investment managers looking at the multifamily sector. I hope you enjoy. All right. Well, we're here today to talk about the latest in market trends, and I'm really excited to have with me my guest in person, Jeff Adler, who is head of our market research at Yardi and our in-house economic expert. And so Jeff, for those who don't know you already, would you mind just doing maybe a quick introduction of yourself? Sure. I run Yardi Matrix. Been doing that since 2014. Before I joined Yardi, I was a chief operating officer of an apartment REIT, INCO, based in Denver. Mm. I was also in the commercial insurance industry. Mm-hmm. And before that, about 10 years with Progressive Insurance, where I ran the state of Colorado and basically pioneered all the initial direct-to-consumer marketing back in the '90s- Mm-hmm ... and brand building. So at Yardi Matrix, we're a independent research house, as it were. Think about us as a big data refinery. Mm. So we cover, in multifamily, 128,000 properties, anything over 50 units, 25 million total units in all forms of both completed as well as new supply. The new supply pipeline's about five and a half million units in total. Mm. And that data that we collect is an amalgamation of independent research, as well as refined public records from debt sources, from public county recorders, from tax assessors, as well as data that is supplemented, aggregated, and anonymized Yardi Voyager data, which is, again, aggregated and anonymized- Mm-hmm ... as a supplement to the independently collected research. So taken together, it's probably one of the most comprehensive data sources on commercial real estate, particularly in multifamily- Mm-hmm ... and it's used by over 1,200 clients globally- Wow ... who invest in US real estate. Wow. Amazing to see the growth that you have, Yardi Matrix and- Yeah ... everything you guys are doing. Pretty cool. So, and want to focus today's conversation on multifamily- Yeah ... specifically. So let's talk about market rate- Sure ... apartment, and talk a little about affordable as well. Sure. I think those are two trends that- Yeah ... I'm hearing a lot from our clients, what they're interested in. Sure. So, maybe sort of the high level view. What's kind of your current take on the economy and the market, and then we'll sort of dive into some niches from there. Yeah, so just understanding sort of the multifamily industry, and I'll maybe kind of circle back on the economy. Where we're at right now is we still have an overhang from COVID. Mm-hmm. Okay? And the biggest story at the moment is just the sort of completion of the historic supply pipeline- Mm-hmm ... that came out of COVID- Mm-hmm ... into the Sun Belt. Mm-hmm. Okay? So you had this run up in rents, mass movement of people, right? 40, 50% increase in rents in '21, early 2022. That engendered also a tremendous supply response where it was enabled to be able to respond- Mm-hmm ... which is really the Sun Belt and the Mountain West. Mm-hmm. Those units are now delivered. The peak supply came in '24. Mm-hmm. '25 was a total of 585,000 units. '24 was like 700,000 units. Mm-hmm. We expect this year, in '26, to be around 450-ish. It might go down a little bit to 410-ish, and then pop around 450 from here on out. Mm-hmm. Mm-hmm. But the mix of those units that are being delivered is changing- Mm-hmm ... as we kind of go through this cycle. There's more affordable than there used to be. Mm. There's more SFR-BTR- Mm-hmm ... single-family built around communities- Yeah ... than there used to be. There's more partially affordable than there used to be. The actual true market rate properties is about back to pre-COVID levels in that supply delivery. Though, the markets are shifting a little bit toward more to the Midwest. Most of it is still in the Southeast, and those Southeast kind of Sun Belt markets, Mountain West, think Denver, Phoenix- Mm-hmm ... kind of thing, in terms of the mountain. Salt Lake City- Yeah ... is the mountains, and then all the Sun Belt. Yeah. High growth areas, high growth economies, lots of in-migration, lots of supply, but the rents in those markets are under meaningful pressure. Mm-hmm. And also, that's filtering all the way through, all the way through rent by necessity, Class B, Class C assets. Mm-hmm. Mm-hmm. Even under pressure in some markets in affordable- Mm ... where customers who would have gone, let's say in Austin, Charlotte, Raleigh, customers who would've gone into LIHTC or affordable housing deals are actually going into market rate deals. Mm-hmm. So that is changing the dynamics of affordability- Mm-hmm ... and rents- Mm-hmm ... in those markets. Mm-hmm. Where in the Northeast and Midwest, where you had not a lot of supply response, rents are still growing 3 to 5%. Mm-hmm. And then along kind of the West Coast, there is a resurgence in San Francisco. That market is recovering, and rents are going up. They're still only 12% above pre-COVID levels. Mm-hmm. And then you have weakness in Seattle, Portland, LA, San Diego, more from sluggish demand- Mm-hmm ... as opposed to a flood of supply. I see. So, it really is much more nuanced than everything's up, everything's down. Right. It really is this sort of like where has demand occurred? Where has supply responded? And so again, the nuance over the last two years has been very unusual. Mm-hmm. And this year's kind of a continuation of the trends we saw in 2025. Mm-hmm. I think it's natural as an investment manager when you see a market with growth in rent- Mm-hmm ... it's an area you want to target as an investment. Sure. Right? Sure. And so I think we probably saw a lot of capital flood in. We did. A lot of construction. We did. And yeah, I hear this Jeremy, over and over again, you can't paint a brush over the entire economy, right? You can't- Yeah. Well- ... go, "Well, we're market." Well, one, we're a huge country. Sure. 350 million odd people, right? Mm-hmm. A huge economy, a huge market, and fairly nuanced. Mm-hmm. And even talking about markets, obviously sub-markets within a market- Yeah ... there's differences. Sure. But I do think one can think about this as, broadly speaking, the Northeast and Midwest did not see rents grow quite as much as the Southeast. Mm-hmm. They don't have the kind of population growth- Mm-hmm ... in Northeast and Midwest- Right ... as the Southeast. Right. So they didn't engender the kind of immediate supply response- Yeah ... okay, in '21 and '22. Yeah. And now with costs being higher, they're not really engendering a meaningful supply response. Mm-hmm. So there in the Northeast and Midwest, it's mostly the effect that more people have to rent for longer. Home prices did go up a lot. Mm-hmm. Turnover is lower, i.e. retention is higher. Mm-hmm. So more people are staying in the apartments. Mm-hmm. And so there's less sort of available supply. Mm-hmm. Okay? And that is likely to continue in the Northeast and Midwest. Yeah. You don't have a lot of population growth. However, you're not going to see collapses in single-family home prices. We're not really going to see a collapse in interest rates, right? So those markets are a little more stable. They didn't see the highs, they didn't see the lows. Mm-hmm. They're a little more steady eddy. Yeah. There, the issue is which markets have regulatory risk. Mm-hmm. Some do, some don't. Mm-hmm. And so that is more of a stabilizer factor. The Sun Belt markets, I love these economies. They're vibrant, they're dynamic, they're still growing in population. Mm-hmm. They're still getting in-migration. They also engender supply response because they want that growth, and this actually, in the long term, will be good for those economies. They'll rebuild affordability. They'll engender sort of broad economic growth. Mm-hmm. It's just something, as an investor, you have to accept the volatility that comes- Right ... with these markets. Right. So think about this as a, if I was relating this back to stocks- Mm-hmm ... there's high beta and low beta. Mm-hmm. Right? Mm-hmm. The Sun Belts are high beta markets. Mm-hmm. Right? They're volatile. Yeah. Great returns, volatile. Right. The Northeast, Midwest, are less volatile, kind of slower eddy, slower growth markets, but- Yeah ... more stable. Yeah. So it sounds like it kind of started with the population growth changes, right? Mm-hmm. The migration through COVID and the pandemic era. I want to dig into specific classes of the properties. Sure. Right? And at least when I think about supply being added- Mm ... traditionally, construction's happening on Class A. Yes, it does. Right? High-end. Absolutely. So how has that affected, specifically demand by class? You mentioned affordable a little bit. Mm-hmm. What I've kind of heard and seen is a lot of construction Class A, but some of the population can't afford that rent. And so what's happening in Class B and affordable- Well- ... and everything else? ... yes and no. And so here's what happens. And this is, as an industry, what we've said is all supply is good. Mm-hmm. Okay? Because there's a filtering effect. Mm-hmm. And when you have a lot of supply, and the absolute corner case is Austin, Texas. Mm-hmm. You have a tremendous amount of Class A supply. Mm-hmm. It has problem absorbing. It starts cutting rents. Mm-hmm. Right? Or increasing concessions. Mm-hmm. That filters all the way through down. Mm-hmm. Okay? And we're seeing price decreases in rent by necessity, Class B, Class C- Mm ... in Austin. Mm-hmm. Just because of the entire market has more supply. Yeah. Period. Yeah. Does it take a lot of supply? Yes. Okay? If you just introduce a little bit of supply, then the filtering effect doesn't really sort of have a chance to sort of work its magic. Mm-hmm. Okay? But the bottom line is these are all connected, interconnected housing markets- Mm-hmm ... including single family. Right? They're all related to each other. Mm-hmm. Not precisely, but related. Sure. And so, when there's a shortage, it tightens everything up. When there's a surplus, it loosens everything up. Mm-hmm. So we're also seeing that to a certain extent, though it's really hard to figure out, is the sort of out-migration effect of internationally legal immigrants. Mm-hmm. We think there's some impact in that loosening, I'll call it the informal multifamily sector. Under 25 units- Mm-hmm ... very mom and pop kind of- Mm-hmm ... kind of landlords. Sure. But it kind of, again, it loosens the entire marketplace. Mm-hmm. So our general view, in terms of housing solutions, is that supply is the answer. Any kind. Mm-hmm. Now, it would be great if regulatory burdens were removed from the production of housing. Mm-hmm. And if those regulatory burdens were removed, then quite frankly, developers could deliver lower priced unit more targeted at the sort of middle of the market- Mm-hmm ... where there is a higher degree of demand. Mm-hmm. Absolutely. Yeah. And there is a need for that. But regulatory constraints have pushed up the cost of production to the extent that the only thing that can pencilIs Class A. Yeah. Okay? So our kind of both from a private market analysis as well as our public policy position is we just want to have more supply, make it easier to produce, and we really have these test cases. They're right in front of us right now. Mm-hmm. We have cases where cities engendered supply, albeit at the upper end of the market, and those that didn't. And those that did have seen more supply and slower rent growth, or in many cases, rent declines. Mm-hmm. And those that didn't, are not seeing that benefit. Mm-hmm. So, the fact of the matter is, markets in housing work, but they don't work immediately. Mm-hmm. They need about two to three years- Right ... to play out. Yeah. So, you have to have a little bit of patience, right? It's not necessarily like widgets. Mm-hmm. You can't just make more widgets- Yeah ... within three months. Right. Takes about three years. Right. Okay? And even that can be lengthened or shortened depending upon the regulatory environment in that community. Mm-hmm. If you go to California, as we are here right now- Mm-hmm ... it can take five, six, seven years to get a project built. Yeah. In Texas, two to three years. Yeah. At most. Yeah. Probably more two. Yeah. Okay, but three pre-planning, and then two years to build. Yeah. Well, the faster you can get, the less regulatory obstacles, the faster the markets can work. Mm-hmm. Markets do work, and they work in housing, but with a lag. Yeah. So for investment managers putting capital- Mm-hmm ... into new construction or developers- Yes ... would you say looking at these different regions, so Sun Belt, for instance- Mm-hmm ... should they pencil out rent lower than what's the market now? And then maybe in the Midwest, you're saying it's maybe more stable and it's more- Yeah, so- ... you can project that two, three years out ... as I'm discussing sort of investment strategy in 2026 with my clients, what we kind of see is, look, if you want to go into the Sun Belt, because I love these cities- Mm-hmm ... near term, you're basically looking for a busted capital stack. Mm-hmm. You're looking for a good entry point- Mm-hmm ... because rents are still going to be under pressure- Mm-hmm ... declining- Yeah ... in many cases. Yeah. All of this year, we think in the Sun Belt, things kind of turn around third quarter 2027. Okay. Stop declining, start rising. But that's seven quarters of- Yeah ... a tough slogging. Yeah. So, if you're going to make a deal pencil in those cities, you're probably going to have to find some kind of stressed capital stack. Mm-hmm. Some special situation. Mm-hmm. If you're doing a development deal that won't deliver until '28 or '29, then you have to pencil the downdraft and then that kind of a recovery. Mm-hmm. Construction costs are coming down. Mm-hmm. There is more supply of labor. Material cost increases haven't been so much as to overwhelm the savings on the labor side, the contractor side. And there's plenty of capital. Mm-hmm. Debt capital and equity capital returns are a bit of an issue. So penciling development is still getting done. Mm-hmm. Right? So, it's not as if development's shut down. It has not shut down- Yeah ... whatsoever. It's just happening at a more modest pace. Yeah. Now, if you're going to the Northeast and Midwest, value adds work, right? Mm-hmm. Because rents are rising. Rents on renewals are rising, rents on new business are rising. And so you can pencil a 3 to 4% increase. Mm-hmm. You look at your turn costs and the value add spread, and you can kind of make deals work. Yeah. In the Northeast, you have some rent growth, which is really surprising for me. I grew up in New York, and to have 5, 6% rent growth in New York State is kind of like, wow, that's something I didn't really sort of think about. The Northeast has more of a regulatory risk component- Mm-hmm ... and you should be compensated for the regulatory risk. Mm-hmm. There's a rent control referendum, which will likely be on the ballot in Massachusetts. It's not supported, I think, by the governor or the mayor. That's a regulatory risk that you have to underwrite. Sure. Okay. So, those are the kind of issues. Now, if you're looking at the West Coast, right? So again, if I look at the Mountain West, Salt Lake City, Phoenix- Mm-hmm ... those are dynamic areas. Same thing like the Sun Belt. Denver's and Colorado's a little more like the slippery slope, quite frankly, of California. Mm-hmm. There's a lot of regulatory pressures. Demand has been receding. And after the supply wave is done, the economy's really not growing. Yeah. In fact, Colorado lost population. I live in Denver- Yeah ... so I'm a little more familiar with that market. Hopefully the traffic got a little bit less for people. Yeah. One of the side benefits, but the economic growth is much slower. So, this is where you're looking at market dynamics. Mm-hmm. And you also have to look at, I'll call it political risk- Mm-hmm ... as well. Mm-hmm. And it's a non-trivial factor. Yeah. You have to sort of underwrite to it. I do also know some investors that are going into California- Mm-hmm ... willing to accept the political risk associated with that- Yeah ... because so many people won't. Right. And so they're looking for a mismatch in the pricing, and they think they can be adequately compensated for that exposure. Yeah. So, that's the other thing I love about real estate is that there's a million different investment strategies- Mm-hmm ... that can work for the right kind of capital- Yeah ... as long as it's paired with it appropriately. Yeah, and I've heard that in California, if you sort of figure out how to navigate the environment- Right ... the returns are there for you. And because so many people just say, "Hey, I'm going to bow out. I'm done," you may have a little bit less competition. Right. Well, there's not as much. The state is attempting to engender supply. Mm-hmm. It's still having a hard time getting out of its own way. Mm-hmm. And the state wants one thing, and the municipalities want another. Mm-hmm. And there's a lot of funding for affordable housing, which is wonderful- Mm-hmm ... except so many other mandates are loaded onto it. Mm-hmm. We've seen a very famous case study. It was written about in Ezra Klein's "Abundance," where it cost more in San Francisco to build an affordable unit than a market-rate unit. Oh, wow. And that makes no sense-It shouldn't be, and yet it is. Yeah. And that hurts. Well, out of the federal government, we just saw a significant increase in the number of tax credits, 12.5% increase in low-income housing tax credits- Mm-hmm ... which is great. Mm-hmm. A reduction in the 4% test for what would qualify for a 4% credit- Mm-hmm ... from 50% to 25% of the basis. Mm-hmm. So, the federal government is attempting to provide more incentive capital for more- Mm-hmm ... affordable housing. But if you load that affordable housing with all these other cost mandates- Mm-hmm ... you actually will not get as much as you think. Mm-hmm. So, these are sort of the, I'll call it, some of the nuances- Yeah ... associated with that. I think, however, again, our approach generally is, we encourage a reduction in regulatory burdens. Mm-hmm. A focus on the production of housing- Mm-hmm ... and not loading it up with other, perhaps in isolation, wonderful policy goals. Mm-hmm. But when they're loaded on top, they actually sink the original policy goal. Mm-hmm. As an investor, and an investment manager, and an allocator of capital, a lot of folks are basically going on the debt route, right? Mm-hmm. That's one of the reasons there's so much debt capital- Yeah ... is that by going through debt, you can garner a decent return, and also provide the optionality of taking the real estate if for some reason the loan doesn't perform- Right ... at a very positive entry point. Yeah. So, there are many investors that are playing both equity and debt strategies- Mm-hmm ... because they provide optionality. A little more flexibility- Exactly ... good exposure still at the end of the day. Exactly. Yeah. Yes. So you talked about regulatory stuff and so the tax incentives. Yes. I want to go there, so thanks for bringing that up. We mentioned earlier Class As where most development will take place. Yes. Are you seeing, though, affordable development, like ground-up affordable housing development? That's the first part of the question. Sure. Second would be conversions, whether it's- There are some of that ... office to multifamily- Mm-hmm ... which I think we've been talking about for a while now. Yes, we have. But even a value-add project- Yeah ... taking something that was historically market-rate that's maybe run down, Class B- Mm-hmm ... Class C, or older. Is there incentive, are there market trends that are moving developers or capital- Sure ... sources towards- Sure. Well, first of all- Building affordable ... it absolutely should be noted that inside of our forecast for new supply, the number of affordable units is about twice what it was pre-COVID. Mm. So if it's just fully affordable, we project in '26, 84,000 fully affordable units will be delivered. Wow. That's ground up- Ground up ... new development, okay. Ground up. In 2019, that number was 41,000. Wow. So, there's absolutely, and if even you look at over the next couple of years, in 2028, we think there'll be 80,000 delivered. Mm-hmm. So, the affordable as market rate has come down meaningful, and we think market rate and partially affordable will be in a, I'll call it, 330, 340 range- Mm-hmm ... over the next three years. Mm-hmm. Again, that compares to just almost equivalent to what it was in 2020. Mm-hmm. Okay? So you can see, market rate about the same, affordable higher. And within even that market rate number I just gave you, partially affordable is 40,000 units higher- Mm ... than it had been- Mm-hmm ... pre-COVID. Mm-hmm. So, we're seeing a much higher percentage of the total supply being fully affordable and partially affordable due to government incentives. Mm-hmm. Government would like more of these kinds of units built. Mm-hmm. Now, it's most effective in places that are very expensive in the first place. Yeah. Right? So, again, if you're delivering in Austin, Texas, or in Indianapolis, Indiana, 60% of light tech new product, that's wonderful. You're not helping affordability- Mm-hmm ... you're improving the quality of the asset mix- Mm-hmm ... because market rates are at 60%. Yeah. Okay? In places like Boston or California or even Miami, if you could deliver a 60% AMI product, you're delivering both higher quality and lower cost. Mm-hmm. Okay? And the ideal would be to minimize any other regulatory cost associated with that on top of that, to get as much housing for the same number of dollars as you possibly could. Mm-hmm. Okay? Because you've already got a housing shortage, which was partially government regulation driven in the first place. Mm-hmm. Okay? But you're not solving the problem enough, so we still have a problem. Mm-hmm. It's a little bit better, but it's not as good as it could be. Mm-hmm. And it's, again, very local. And we have a measurement of this, which is the first in the industry, where we're actually looking at the interaction effects between market rate and affordable- Mm-hmm ... and basically helping to guide public policy makers to be understanding about, well, what objective are you actually accomplishing? Mm-hmm. Because in many markets in the country, a 60% of light tech deal does not improve affordability per se. Mm-hmm. It improves the asset quality- Mm-hmm ... and it may force filtering and reduce the cost of other assets- Mm-hmm ... in the market. Mm-hmm. Right? So, essentially what you're doing is you're trying to push the market below - Yeah ... 60% of AMI. Yeah. Which does happen for older assets. Mm-hmm. And in other constrained markets, you're doing both new assets, higher quality, and a lower price, which is why you get a wait list, right? Mm-hmm. So, if you put up an affordable housing at 60% of AMI in downtown Boston, in downtown Miami, and in West LA- Mm-hmm ... yeah, you'll have a wait list. Got you. Okay? But if you do that same property in Austin, Texas, they will be in a dog fight for customers. Hmm. Interesting. And for those who don't live and breathe this as much, can you talk about what is partial affordability? And we were saying 60% AMI. Yeah. Can you describe what that means? When we define fully afford... I'll do fully affordable, partially affordable. Fully affordable is when, in our definition, 90% or more of the units have an income limitation as to who can live there. Mm-hmm. And it's basically commonly because the Department of Housing and Urban Development uses the term average median income. Mm-hmm. So it takes the county's average median income and puts it on a set of deciles. Mm-hmm. Okay? And affordability is targeted at people who are 60% of area median income, or the lower 30% of the distribution. Mm-hmm. That's called affordable. Mm-hmm. Fully affordable. Partially affordable just means that between 90% and 5% of the units have an affordability requirement or have an affordability sort of limitation. Mm-hmm. Okay? And there are programs, again, in some states it's if you want to build a new property, you have to have 20% of the units being affordable. Mm-hmm. Right? Defined by some level AMI in that county. Mm-hmm. Could be a 10%, could be a 15%. There are programs in Texas where 40 or 50% of the units have an affordability, and if they convert a market rate to some fully or partially affordable, they'll get a property tax abatement- Mm ... or property tax incentive- Mm-hmm ... to do so. Mm-hmm. And in Texas, it's about preserving an option because, in reality, the current market rates don't justify the tax abatement. Mm. But what they're essentially doing is giving up a benefit today, the taxes- Mm-hmm ... to preserve affordability to the future. Mm-hmm. Okay. So there's a lot of that activity going on in the Carolinas and in Texas of conversions- Mm-hmm ... of existing multifamily that's market rate- Market rate conversions, yeah ... to partially or fully affordable. There's mandates called inclusionary zoning in some markets. They're usually like Boston, Miami, New York, California. Mm-hmm. Where if you want to build new market rate, you have to have 20% or 10% affordable, but they'll also give you a density bonus to allow you to do that. Mm-hmm. Right? So, that's how we all try to make this work. So tax incentives and are you also seeing that they're fast-tracking approvals and permits and... In some jurisdictions. I think California has a program to try to fast-track fully affordable- Right ... properties. To help incentivize the developers and investment managers. And it truly is a manmade problem and a manmade set of solutions. An example that I use constantly is the town of New Rochelle, New York in, I think it was 2015, 2016, really wanted to redevelop its downtown. Mm-hmm. It had fallen on hard times. The downtown had a train station straight to Manhattan, straight to Connecticut. Mm-hmm. It had a very affluent suburb, but the downtown was just in rough shape. Mm-hmm. And the town really wanted to redevelop this downtown. Mm-hmm. In order to facilitate development, they created an entire program that laid out, "Here's what we want. If you do these things, 90-day guaranteed approval." Mm-hmm. "No public hearing." Wow. "No set of reviews. Here's all the documents we need. You give it to us what we want, you get approval." Yeah. They wanted 6,000 units. They got 6,000 units. Nice. And those were all built pre-COVID. Wow. So it highlights to me that when a community, a city, state, a county wants housing- Mm-hmm ... and is willing to listen to the people who are building the housing- Mm-hmm ... you can get the housing. Yeah. Okay? And in that case, they didn't offer any tax abatements. Mm-hmm. It was purely the speed of execution- Yeah ... and the surety that... Because it costs a lot to do all this pre-development work. Mm-hmm. That they knew that if they could do it, they would get approved. Mm-hmm. And they got it. Yeah. And just so you understand, for building a LIHTC, an affordable housing deal, the developer incurs all the upfront costs- Mm ... of getting that project all the way through to approvals. Mm-hmm. And then they have to go and get the tax credits. Mm. Many projects don't go that far. Yeah. All right? So if you're a developer or an investor in affordable, right? Mm-hmm. There's all these pre-development costs- Mm-hmm ... that you are not compensated for. Mm-hmm. Or the extent that you're compensated for is only once you've obtained the tax credit. Mm-hmm. And depending upon that state, there could be a backlog or oversubscription of the tax credits. Yeah. So there's a very real risk you could be out millions of dollars- Mm-hmm ... on a project you never got to build. Mm-hmm. And that's something that often gets forgotten or missed. Mm-hmm. And if you really want to improve housing production, as we do, we want there to be a well-functioning housing market. And to have a well-functioning housing market, you need supply to respond with about a two-year lag to demand. Mm-hmm. Just enough so you get a little bit of rent growth. Mm-hmm. Not too much. Mm-hmm. But enough that it keeps everything going- Yeah ... is really affordable to the residents because their income grows. Mm-hmm. In a well-functioning market, you have to make it easy to build. You have to create assurance that projects will get across the finish line. Yeah. That level of uncertainty gets priced in- Right ... and some things just don't get done. Right. It's kind of that second form of incentive, right? Exactly. Not just tax or financial, but just the time. Time. Time. Time and uncertainty. Yeah. Even if it was long, but it was certain- Yeah ... it'd be better than long and uncertain. Yeah. Okay? So you throw that in there, right? So there's-There's risk, and then there's uncertainty. Right. Right? Yeah. To be a developer, you have both. Mm-hmm. Very hard to make things work. Yeah, definitely. Yeah. But I love housing. It's an amazing asset class. It's been historically very profitable to investors over long periods of time. We are in the United States in a period of housing shortage, though one could argue in certain markets, a temporary surplus at the moment. Mm-hmm. But if you look at the trends, that's not the case. Mm-hmm. So I think it's a great asset class. Mm-hmm. I love it. I've been with it for 25 years. Mm-hmm. I love talking about it, analyzing it, helping people succeed in it, and there's a million different ways to be a successful investor. Yeah. Okay. So maybe kind of just wrap things up here. Mm-hmm. Rapid fire on four questions. Sure. Same question in four different ways. Okay. If we think about different investment strategies- Mm-hmm ... just to distill it down to value add, opportunistic, development, I'll distinguish those two separately- Okay ... and then buying just to have a net hold of core asset. Sure. Right? So for those four categories, what would be one or two markets- Mm-hmm ... you'd advise an investment manager go into? So maybe let's start with buying a core operating asset. Where's a good market or a couple of markets for folks to look at? I think a market like Boston is a great market- Mm-hmm ... for a core asset. I also think probably a market like suburban Chicago- Mm-hmm ... is another sort of core asset. Okay. Both are really solid. Okay. And then value add? I like markets like, believe it or not, like Columbus, Ohio, Lexington, Kentucky, Kansas City. These are sort of markets that have decent growth and enough uplift. I would probably even include probably suburban Chicago in that as well. Mm-hmm. Where there's a good rent spread- Mm-hmm ... between new and renewal- Mm-hmm ... and everything's up and to the right. Mm-hmm. Good solid markets, and you could invest in them now. Yeah. Yeah. Versus later. Okay. And we talked a lot about development deals. Yes. And so what would be one or two markets for development? Oh, boy. Development's a little tough to pencil- ... kind of anywhere. Everyone that has had a development deal has had some kind of break on the land. Mm-hmm. So I spoke to somebody who is putting a new deal in West LA, but they had a break on the land price. Mm. So they got the land low enough- Yeah ... to sort of make the deal work. So I think to make a development deal work now, you kind of have to be somewhere where there's enough supply constraints, and you've got to find a special situation. Mm-hmm. So it's a little rough- Yeah ... to be honest with you. Yeah. Okay. So no specific markets. No. Kind of diamonds in the rough. It really is. Diamonds in the rough. Every situation is a special situation. Yeah. It really is. Yeah. And then opportunistic. Opportunistic is really the Sun Belt, right? Mm-hmm. Where you're looking for good real estate that has a capital structure. Usually, these assets were bought at the peak- Mm-hmm ... or sort of started construction at the peak, '21, '22. Mm-hmm. They have variable rate debt, thinly capitalized operator, and are currently in a market or sub-market that's under significant rental pressure. Mm-hmm. And so the whole thing just there's not enough room in the capital stack, and somebody's got to take a write down. Yeah. At this point, it hasn't gotten to the point where the debt is taking a write down. It's mostly the equity- Mm-hmm ... that's getting sort of pushed out. Mm-hmm. And those are pretty much based upon when the debt holder finally says enough. Yeah. Right? We're seeing more of that throughout the Sun Belt. Again, I could go Austin, Charlotte, Raleigh, not so much Atlanta. Atlanta's not been so bad. It has a bigger supply response. Mm-hmm. But Nashville, these are markets that are gr- I mean, they've grown like crazy. Mm-hmm. But there was some excesses. Mm-hmm. Got you. So to wrap things up, one of the things we try to focus on in this webinar series is the practical take- Mm-hmm ... on how software is helping. I think in- Sure ... today's case, it's how market data and research is helping. So maybe bring it back full circle to Yardi Matrix. Yeah. Sure. What are some things that folks can either subscribe to, reports to look for- Right ... or if they're a user of Yardi Matrix- Yeah ... where can they look for information to these insights that you're sharing? Well, for a user, every investment strategy I've discussed, there's actually data points that can help you target that particular strategy. Mm-hmm. Loan maturity data, when things were bought, who owns it, a fundamental performance, new supply. It helps you target those opportunities and to do initial financial underwriting. Mm-hmm. So that you kind of know pretty much you can tag a valuation on the thing- Mm-hmm ... and decide where you want to go with it. Mm-hmm. So that's something for our clients. We do that all the time and help them do that. We do publish overviews every month of the markets, as well as when we actually do a forecast update, we'll actually publish our notes- Mm-hmm ... just to make people aware of what our thinking is. Mm-hmm. Our January report on rents will come out in the next week or so. I think I have a draft in my email box right now. We just completed updates to our rent and occupancy forecasts. Mm-hmm. And those will be coming out this week, first week in February. Mm-hmm. And we also have public reports all on markets that are available to people to get sort of familiar with who we are and what we do. Mm-hmm. And then to learn more about us, and we're happy to show people what we can do for them. And also, inside of other Yardi products, things are plugged in, like Acquisition Manager- Mm-hmm ... where you can basically plug the market research into the acquisition module- Mm-hmm ... to make things a little smoother- Yeah ... on the whole entire process. Yeah.Well, you just made my life a lot easier because we're going to transition after this interview to my colleague, Alexander Lewis, who's going to show us a little bit of Acquisition Manager and how some of the market research works for that. Great. And how our clients utilize that product. Fantastic. But Jeff, thank you so much for the time. Thank you, Jace. It's been a great conversation. Pleasure. Thanks. All right, take care. Hey, Jace. Thanks. That was great content around what's going on in the market. But I want to take a minute and talk about what Yardi's doing on the acquisition pipeline process. So what I have in front of me today is what we call Yardi Acquisition Manager. Now, that's exactly what it's designed to do, is manage acquisitions, but it also does dispositions. We'll talk about that a little bit later. But right off the bat, I have a main dashboard that I'm looking at here, and this is where I can organize all of my deals, whether it's for me or someone from my team across the entire organization. I can invite a lot of people in here to have access to the specific data that they're really interested in, and I can put everything in one repository. That's what's key. And I can come in and I can organize these deals by specific criteria. So if I want to look at all my deals by property type, like it has here, like all ones that are apartment, and there they are. I can filter those. Okay? If I want to look at them by broker, I want to look at all the deals that are with Marcus & Millichap, and there they are. So I have the flexibility to organize my deals by specific attributes, as well as owners of the deal, as well as stages as well. So all my deal stages, like initial interest or LOI, underwriting, preliminary underwriting, I can have as many of these different deal stages I want to find what I'm looking for and organize each and every one of my deals. Okay? So as I go through and I'm looking at specific tasks I need to take care of, I can actually see into one of my deals, and I can say, "Oh, the market research that Yardi has built into this will ask me, 'Is this the property address you're looking at?'" I'm like, "Yeah, this is it." And it'll actually pull in the data for me into my deal set. So property size, year built, last sale price, location, classes, all that data can be pulled directly into my deal. Right? And as I drill down to it, it's going to organize that data into a few different tabs. So my general information, it pulls in that property type and the broker information, as well as that financing information, investor information, list prices, as well as year one predicted NOI, anything else that we can pull in. And then I have some freeform notes that I can put here myself, so some of my narratives around this deal. Okay? And as I go through this process and I'm organizing this with my team about what we want to do next, I could kick off a workflow. And this could be a complex workflow. This can be a simple workflow. This could just be a checklist of things I need to do in order to get through the process to buy an asset. Okay? It's kind of up to you what you want to do, but it can start very simple. Like I want to look at the process of, did we get the OM docs in place? Did we talk to the broker, get our NDA in place? When was that completed and who did it? All the way through to the acquisition completion process that will then create the property inside of Yardi to have my property management team start to do their job and do their work. Okay? It also gives me access to setting up contacts inside the system, external and internal contacts. So if I have contacts at a bank or with a partner, they can be associated with this deal, and anyone outside can be invited into what we're calling a deal room. So this is a very strategic, very secure location where you can promote this deal, and share documents back and forth with outside parties securely in the system as well. And I can push out emails around this too. Okay? In addition to that, I can also start setting up my own comps. Now, these comps can be based upon my existing deals that are similar to, say, this Sunnyvale office park, but they could also be my existing portfolio properties that's inside of Yardi today. And I could even pull in other market research data that's linking to the matrix information to create a more comprehensive comp set for us. Okay, pretty important stuff there as well. And finally, I really like this. I like an interactive map, and this is pretty neat because now I can look at all of my properties around this specific deal that I'm looking at and say, "Well, here's this deal, Sunnyvale Office Park. Where is that in relation to my existing portfolio properties I already own?" So this is the one I'm looking at. Here's the properties I already own in my portfolio. I can start to see where those all connect. Okay? Really, really neat and important. All right. Then obviously, document management is a big part of this. So I can come in and upload documents and organize them however I want, and I can store them in one place and attachment by any types I want to. And as I get them into the system, they are easily viewable and accessible to your team, so they can make decisions based upon the executive summaries that I've created and posted here for my team to review and approve as I go into my IC when this property's ready to make a decision on. Okay? It's a pretty important part of this as well. All right? Now, there's other dashboards inside of here. I do acquisitions. We do dispositions. So any property that I'm ready to sell, I can actually do the same thing, right? This property, Sunrise Tower, I'm ready to sell it. I can push it through an actual workflow to go from preparing property for disposition to finalizing escrow, PSA, and everything else on the other side of this. Okay? I do CRM inside of here. I can track all my contacts and my activities. I can see what all the different tasks and things that I've done in, say, I don't know, maybe the last year or something like that. I can search for all activities that I want to get into, and I can find them all inside of here. Oh, let's go back to January 2025. There we go. And I have a bunch of activities that I need to follow up on, things I need to do, people I need to reach out to, and I can leave comments, right? I can finalize actions and see this has been completed, ready to go, save my changes, my contacts, and my activities are all stored in here as well. Okay? So from just the basis of putting all of your deals in one location, centralizing and building your own database. Now, this is important if you have an AI strategy, when you want all that information in one place through Yardi, this is a critical component of a data set you want inside of here to communicating with brokers, communicating with lenders, communicating with partners. All this is in one location, and then once you finish the workflow process, it'll set that property up again inside of Yardi for your team to start the process of ownership and management. Okay? So all right. That's all I got for today, guys. Thank you so much for your time. I appreciate that. And for those watching, if you want to know more about this and you want to get into some additional details about it, please reach out to us and talk to your sales person, and we'll do our best to get you a more detailed demo, okay, whenever the time is right. So thanks a lot for your time, and we'll catch you next time.