Why Retail & Rentals Rule the Sun Belt | Mark Roberts, Crow Holdings

本站添加: 2026-06-03

[00:00:02]There have been questions about the multi-family market in certain Sunbelt markets. But it might surprise you to know there wasn't much retail built over the last several years in those same markets, despite the fact that there was this huge population migration. So retail is doing really well in many of those markets. The other one that investors shouldn't overlook, I know they've been concerned about supply and multi-family, but when you look at the lack of housing affordability for single-family homes today, it makes a strong case. Last year there was over 500,000 apartment units absorbed in the US. That's twice the normal pace.

[00:00:37]Because you have those people that do want to buy a home, those first-time home buyers, they're sort of priced out of the market. Home prices don't seem to be going down anytime soon. Mortgage rates aren't coming back to where they were in over the last 15 years. So they're going to be priced out of buying homes. So the next best choice for them is renting an apartment. Now, what you do have to do is be smart about where you're picking your spots. Look at where the job creation is and where the population growth is. Yes, the Sunbelt goes through cycles, but cities that have higher employment growth and better population growth tend to right themselves more quickly. So I >> [music] >> would, you know, take a good look at many of the Sunbelt markets. Some of the coastal markets have constraints on rent controls and things like that. So investors need to discern where the better relative value is. It's not like we're in a falling interest rate environment where you can just buy anywhere. You have to be selective and look at those cities and those property sectors that have more sustainable earnings growth. Residential, particularly in manufactured housing, uh where occupancy rates are 97% or more, don't overlook industrial. The supply has come down considerably.

[00:01:46]There's an effort to have more onshoring. That's all going to benefit the industrial market. And then retail, they're fully occupied. Rents are growing at twice their annual pace. And the cap rates are higher in that particular property sector. So, there are a lot of good things to look at. One I haven't mentioned is office. I'm still skeptical of the office market. Mainly because the occupancy rate it's going to take 4 to 5 years at typical demand trends just to get it back to average.

[00:02:13]So, in that time frame cap rates they may not be high enough to pay for the cost of capital improvements that's necessary. But, when you look at it in a portfolio context I'd still look at having an underweight to the office market and being very selective [music] on the cities you choose and the and the office assets that you consider.