Cityview sees opportunity in West Coast multifamily markets

Cardoza added that buyers of multifamily properties are becoming more aggressive given that the Federal Reserve is expected to begin lowering interest rates next month and I’m happy to place bets.

Where have deals been the hottest? Cityview is seeing the most activity in the Bay Area, Seattle and Denver.

“Seattle has also improved significantly, after a difficult run over the last few years. And operationally, it has improved significantly in terms of occupancy and rents, absorption of the product that has come to market there over the last 24 months,” Cardoza said.

While Los Angeles has remained largely “flat” operationally, the metropolitan area has seen increased activity recently, the real estate investment firm noted.

Cityview currently has a few things in mind. One is assets that are priced favorably below replacement cost, which is “a number that gives us some confidence in where it’s being valued today and some operational growth in the asset going forward,” Cardoza said.

The second is focusing on entitlement projects in its core markets, which are mostly on the West Coast. Cardoza estimated the government approval period would be two years, with construction taking another 24 months—a total of four years.

“We don’t think there’s going to be enough supply coming to the market at this point. And we think this is a good opportunity,” he said.

Cardoza added that there is not much capital for development, which means construction will be low. But he believes Cityview will have ample opportunity to cash in on what he sees as an undervalued asset.