Increased activity from commercial and multifamily buyers, in Alabama and across the country, continues to benefit property owners in multiple sectors.
“You don’t hear about it a lot in these parts, but it is actually a very well-loved property type,” Hagwood said. “Fortunately, Capital One out of Birmingham is one of the leaders in that particular segment of commercial real estate. … It’s something we have focused on for many years.”
Hagwood said different regions of the U.S. view manufactured home communities differently, and it has evolved into an acceptable form of affordable housing in many areas.
It’s stable,” Hagwood said. “Historically, there’s not a lot of turnover, and it’s providing housing for a large segment of the population who don’t want to be in an apartment. These residents own their home, and they’re paying site rent at the property.”
When it comes to Alabama, Hagwood said to expect to continue to see more investment in the multifamily sector.
You have certainly seen a tremendous amount of activity throughout Alabama, with not only local investors buying local deals, but moreso out-of-state investors coming into Alabama for the first time,” Hagwood said. “People have seen the quality of life here, they’ve seen that it wasn’t picked to death over the past few years, and all things considered, we have pretty good economic fundamentals here. To some degree, the word has gotten out.”
Hagwood said investors seeking yield have been forced to look at markets like Birmingham for the first time and are discovering a healthy supply of quality product.
One of the drivers of this investment has been the record-low interest rates of the past few years, something Hagwood said will eventually end, but has driven large investment while it has lasted.
“I have been through many, many cycles, and do higher interest rates quell activity? There’s no question about it, but they also create a tremendous amount of opportunities for the next cycle. … I think you’ve really got to look at it from the standpoint that it also creates an opportunity for the next guy.”
As homeownership continues to trend downward, Hagwood said that and low interest rates should drive a continued growth in multifamily building and investment.
There is a need for housing,” Hagwood said. “There is going to be a need for housing. Home ownership is on the decline. That seems to be the trend, and people have to go somewhere. … The capital is there for multifamily. The rates are as close to free as you can get. There’s no question that has created a lot of the demand.”
Hagwood is a member of the Alabama Center for Real Estate Corporate Cabinet.