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Full Interview with HSR’s CIO Paul Perkins

Navigating Real Estate Success: Insights from HSR's CEO and CIO


Strategic Market Selection and Addressing Headlines

Perkins emphasized the importance of identifying specific key neighborhoods rather than broad city-wide acquisition mandates. By focusing on sought-after pockets of major cities, HSR has been able to maximize returns while minimizing risks, demonstrating resilience even during market downturns.

In addressing broader market concerns, Penner and Perkins acknowledged recent negative headlines about commercial real estate, highlighting the distinct challenges different asset classes face. They noted that the office market is struggling due to rising interest rates and the persistent shift toward the work-from-home culture, which has led to prolonged vacancies and downward pressure on rental prices. In contrast, the multifamily sector, HSR’s primary focus, continues to demonstrate strong fundamentals.

Market Outlook Amid Economic Changes

Looking ahead, Perkins anticipates a slowdown in investment activity among groups that were highly active in the last few years due to challenges in managing legacy assets and securing new capital in a tightening financial climate. He highlighted how short-term, floating-rate loans secured during periods of low interest rates are maturing under drastically changed economic conditions, leading to significant refinancing challenges. This shift from an era of abundant capital to a period marked by restricted funding and growing distressed assets opens strategic investment opportunities for HSR.

Adapting to Market Shifts and The Development Pipeline

Diving deeper into HSR's strategies, Perkins outlined various value-add opportunities the company plans to capitalize on. By adapting to current economic conditions, HSR aims to invest in properties facing physical, operational, or financial challenges, capitalizing on emerging opportunities.

Perkins highlighted a significant slowdown in new multifamily construction starts, attributed to increasing capital costs and economic headwinds. He predicts that this slowdown will lead to a strong landlord's market, as the demand for rental housing is expected to exceed the available supply as the economy recovers.

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Important Disclaimer:

The summaries, descriptions, and content in these videos are for informational purposes only and do not constitute tax, legal, or investment advice. The views expressed are those of the speakers and do not necessarily reflect the official policy or position of HSR or its affiliates. Investing in real estate involves risks, including potential loss of principal. HSR does not guarantee the accuracy or completeness of the information provided in the summaries or videos. Consult with qualified tax advisors, legal counsel, and financial planners before making any investment decisions.

Furthermore, these videos and their written summaries do not constitute an offer to sell or a solicitation of an offer to buy any securities or investment products. Any such offer will be made only by means of official offering documents and in accordance with applicable laws.

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