With the apartment rental market continuing its strong course across all Chicagoland submarkets, the market sector is seeing plenty of new trends.
According to Patrick Tuohy, vice president at Marquette Bank, one of those includes the possibility of Class A buildings facing headwinds with the amount of new units coming to the market over the next 12 months.
Additionally, operators and investors are continuing to upgrade Class B and Class C apartments to meet the demand. Although the multifamily market keeps booming with many people opting to rent over owning a home, there are some things to be aware of. Tuohy says that with single family underwriting guidelines for new home buyers being much more stringent than what was witnessed during the 2003 to 2008 housing cycle, tenants have to have stronger financial well-being versus the previous cycle.
“Student loan debt is an additional economic burden that will keep them as apartment renters longer versus previous economic cycles,” he explained. “Freedom to move at will versus being a condo owner is also important in the job market today which is very fluid.”
Touhy will be covering this, as well as the markets that are improving and growing, and the latest tenant demands in the multifamily market, at Illinois Real Estate Journal’s Chicagoland Apartment / Multifamily Summit on March 23.
With the conference just days away, IREJ couldn’t help but get an inside scoop on the subject and to find out Tuohy spends his time outside of work–so we asked him.
Most requested loans?
“Loan requests are spread over new acquisitions for ‘value add opportunities,’ clients who have been in the industry for many years are accepting the higher price points and continue to add to their portfolio.
I am also providing a combination of new mortgages with lines of credit for long term owner/operators who need access to their equity on a short term notice.”
Concerns about the multifamily market:
“Is the amount of new product coming on line in the Class A market? And what will the effect be on the market if this is not absorbed as planned?”
Expectations for the 2016 multifamily investment market:
“For 2016 the job market continues to improve for Chicago which is the single most important factor in driving the low occupancy level the market is currently experiencing.”
On his role:
“My main focus is multifamily and mixed use – I also assist clients who are retiring from the business and identify/analyze triple net investments for them.”
Getting his start in CRE:
“In 1982 I worked for Merrill Lynch, I shifted my focus to affordable housing bonds for multi-family and made a decision this was the area of finance I wanted to focus my career on.”
On the career he would pursue if he wasn’t in multifamily:
“I can and will underwrite commercial transactions on a select basis if the economics are not only sound today but does the business model for the asset survive the internet and technology advancements effecting their market.”
Reflecting on his experiences:
“I remember in 1989 I had the opportunity to buy a 100 unit apartment building on the North Side but investors at that time so no real interest in the industry. It was very difficult at that time to bring new capital into the market.”
Biggest life lesson learned:
“Don’t be afraid of hard work, this is not a dress rehearsal, make every day count.”
“Love to travel to new places and experience different cultures.”
“I am stuck in the 70’s & 80’s – Chicago – Eagles – James Taylor, etc.”
The public figure he would like to meet:
“I would like to meet Mike Madigan and ask him what his plan is to put is to put Illinois back on track and why he does not listen to Governor Rauner who is there to help our citizens.”
“I got married for the first time at 51 – that was ten years ago – I have a great marriage to a wonderful woman who has helped me get to where I am at today.”
Last book read?
“I am a news junkie – I can’t get enough of current macro and micro economic business data.”
Favorite cause to support?