By: Ellie Perlman, founder of Blue Lake Capital, a REIT specializing in multifamily investing

(December 24, 2024) — As a passive multifamily investor, you’re always looking for ways to safeguard and grow your wealth, regardless of the political landscape. With Donald Trump re-elected to office, the real estate market may experience some significant shifts, presenting both opportunities and challenges. Here’s what you need to know to make informed decisions and stay ahead in this evolving environment.

Understanding the ‘Trump Bump’

Historically, Trump’s pro-business policies have emphasized deregulation, tax incentives, and infrastructure investment, which can create favorable conditions for real estate markets. During his previous tenure, we saw increased demand for real estate development in urban and suburban areas as the economy expanded. Passive investors should consider:

• Potential Economic Growth: Policies promoting business expansion and tax cuts may drive job creation, leading to higher demand for rental properties.
• Reduced Regulation: Looser regulations on construction and development could accelerate the approval of new projects, potentially increasing inventory in some markets. However, this could also be challenged in other factors we’ll discuss below.
• Interest Rate Outlook: While the Federal Reserve operates independently, market speculation on Trump’s influence could affect borrowing costs. Investors should watch for rate stability or reductions that could favor multifamily acquisitions.

Potential Impact of Decreased Housing Supply on Multifamily Investments with Trump

One of the pressing challenges multifamily investors should monitor is the potential decrease in new housing supply due to shifts in construction costs and workforce availability. If tariffs on construction materials increase under the new administration, the cost of building new housing could rise sharply, making it less attractive for developers to initiate new projects. At the same time, stricter immigration policies and deportations could further strain an already limited construction labor force, leading to project delays and higher labor expenses.

For passive investors, these dynamics may have significant implications. A decrease in new housing supply could tighten rental markets, potentially driving up rents and boosting the performance of existing multifamily assets. However, the same supply constraints might discourage developers from launching new projects, reducing the overall growth pipeline in certain markets. Investors should consider these factors when evaluating new opportunities, focusing on markets where supply-demand dynamics remain favorable and partnering with sponsors who are experienced at navigating construction and operational challenges.

Navigating Market Volatility

While opportunities abound, political transitions often bring uncertainty. Passive investors can maintain stability by focusing on tried-and-true strategies:

1. Prioritize Stable Markets: Consider investing in markets with strong population growth, diversified economies, and limited new construction. Cities in Texas, the Carolinas, and the Southeast remain attractive due to favorable demographics and job growth.
2. Invest in Recession-Resilient Assets: Class B and C multifamily properties in high-demand areas often outperform during economic downturns. These properties cater to tenants who might “trade down” in uncertain times, ensuring steady occupancy rates.
3. Lean on Experienced Operators: Partnering with a seasoned sponsor who has navigated previous economic cycles can provide the insight and stability needed during market transitions.

The Role of Real Estate in Diversification

As a passive investor, diversification is your shield against volatility. Real estate offers unique advantages that other asset classes, like stocks and bonds, may not:

• Inflation Hedge: Multifamily assets typically see rental income rise with inflation, preserving purchasing power for investors.
• Cash Flow Consistency: Monthly or quarterly distributions from real estate investments provide predictable income, a rarity in turbulent financial markets.
• Tangible Value: Unlike stocks, real estate is a physical asset that doesn’t disappear overnight. Even in volatile times, its intrinsic value remains intact.

During political transitions, the diversification benefits of real estate become even more critical. Stocks may respond to short-term news cycles, but multifamily investments are grounded in long-term fundamentals like housing demand and demographic trends.

Positioning Yourself for Success
To maximize your success during this period:

1. Stay Educated: Follow market trends, policy announcements, and updates on key real estate metrics. Knowledge is your best tool in uncertain times.
2. Engage with Your Sponsor: A transparent and proactive sponsor will keep you informed about your investment’s performance and any adjustments needed.
3. Look for Tax Benefits: With potential extensions of Trump-era tax cuts, explore how to optimize depreciation, 1031 exchanges, and other real estate-focused tax strategies.

Final Thoughts

As we enter this new political chapter, real estate remains a pillar of stability and growth for passive investors. By understanding the ‘Trump Bump,’ preparing for market volatility, and leveraging real estate’s diversification benefits, you can confidently navigate these times and position your portfolio for long-term success.

Investing in multifamily real estate has always been about balancing risk with opportunity, and now is no different. The key is to remain focused on your financial goals, remain disciplined, and keep moving forward.

P.S. If one of your priorities, like mine, is building and preserving your wealth through multifamily real estate investments, click here to download my new eBook: The Ultimate Guide to Creating & Preserving Your Wealth.

TUCSON, AZ (December 24, 2024) SAHBA, Southern Arizona Home Builders Association, and Land Advisors Organization are thrilled to announce the 2025 Tucson Land & Housing Forecast, sponsored by Landmark Title Assurance Agency. The event will be on February 27th from 3:00-7:00 pm at Hacienda Del Sol.

Please save the date for what is expected to be a complete and unvarnished look at the current and future state of the market in Southern Arizona. Speaker Lineup and ticket information coming soon!

For Sponsorship opportunities, please contact:

• David Godlewski- David@sahba.org
• Will White- wwhite@landadvisors.com

TEMPE, ARIZ. (Dec. 24, 2024) ‒ Liv Communities, a developer and operator with an extensive track record in amenity-rich multifamily and senior living projects, experienced an exceptional year of growth and recognition, with new communities set to open in 2025.

Recently honored among 2024 Best Places to Work in Multifamily, 2024 Best Places to Work in Multifamily for Women, 2024 Top Work Place by AZ Central, and 2024 Best & Brightest Companies to work for in the U.S., Liv Communities continues to set the standard in creating vibrant, community-focused living spaces.

“As we celebrate the incredible milestones of our communities – some thriving for 20 years, others reaching their first decade, and exciting grand openings – it’s clear that our brand isn’t just about places to live; it’s about fostering personal connections and forming a sense of belonging,” said Robyn MacKeller, Vice President of Brand Marketing for Liv Communities. “Our residents’ loyalty speaks volumes about the strength of our brand and the meaningful experiences we create at Liv. I’m thrilled to see our footprint expand into dynamic areas like build-to-rent and 55+ communities, paving the way for more opportunities for even more people to live their best lives.”

Liv Communities held grand openings in Metro Phoenix for two communities:

♦️ Sol38 by Liv, a luxury 360-unit multifamily community in Laveen, Arizona, developed with the Rockefeller Group. It’s the fifth residential development completed by the partnership in Metro Phoenix. The duo has delivered a total of 1,829 apartments in the Valley. Located on 25.51 acres at 3875 West Dobbins Road, Sol38 by Liv offers studios and one-, two- and three-bedroom floorplans.

♦️ Liv+ Union Peak recently opened its doors as the company’s first 55+ age-qualified community. The upscale community is located in the Norterra/Union Park area at 25400 N. 21st Ave., in Phoenix. It boasts 145 units and brings upscale senior living to an underserved market.

Liv Communities celebrated milestones at several of its communities:

♦️Liv Northgate in Gilbert, Arizona, and Liv Ahwatukee in Phoenix celebrated 10-year anniversaries.

♦️Liv Wildwood, Ludington, Michigan, and Liv Arbors in Traverse City, Michigan, celebrated 20-year anniversaries.

Liv Communities also broke ground on two new communities:

♦️Liv Sky Cottages, Flagstaff, Arizona. The build-to-rent project is scheduled to open in late fall 2025.

♦️Liv East Bay, Traverse City, Michigan. The build-to-rent project is scheduled to open in early winter 2025, partnering with Allen Edwin Homes.

The developer/operator also plans future brand expansion:

♦️Liv Communities closed on land, calling it Liv+ Eastmark, in Mesa, Arizona, where it plans to build its second 55+ age-qualified community in the master-planned community of Eastmark.

“Since the opening of our first Liv (branded) community, Liv Avenida in Chandler, Arizona, to our newest grand opening at Liv+ Union Peak, countless enhancements have been made to curate the ultimate ‘Liv,’ experience. Building our brand is about actively discovering, and then acting upon what helps our customers, residents and all stakeholders live their best lives,” said Liv Communities’ COO Heidi Arave-Noonan, who was honored by helping moderate the Multifamily Women’s Summit in Phoenix in September. “We are never satisfied. Never finished. We spend our time working to improve our brand from the way we develop and operate our communities, to how our team is served and how we serve others. Celebrating all of these fabulous milestones brings all of us so much joy.”