Posted tagged ‘Morgan Stanley’

What Maslow and eCommerce Mean to Your Investment Strategy

November 15, 2011

Question:  Now that you are such a large company, why do you still focus your investment dollars on single-family residential properties?  Don’t you want to get into the commercial realm? 

That question, or a variation thereof, is asked of us nearly every day.  To us, the answer has always seemed obvious…regardless of the economy; people ALWAYS need a place to live.  Very recently articles published by the Wall Street Journal and Morgan Stanley have helped strengthen that position.

Commercial properties have a tremendous amount of appeal.  The thought of driving by an office building or a strip center and calling it ‘yours’ is attractive, and it’s certainly easier to show off a commercial property than it is 100 single family homes.  As the Wall Street Journal points out though, the future for commercial properties is weak at best.  The success of a commercial investment rides with the success of the overall economy and the good fortunes and business success of your tenants.  The simple movement of our society towards eCommerce, the ability to buy goods from home without having to actually visit businesses, calls into question how important an actual storefront will be in the future.  When your investment is dependent upon the success of a business, and yet that business’ success isn’t dependent on your property you find yourself in a precarious investment scenario.

Our philosophy on investing is quite simple – for any Real Estate investment to work, the rent must be paid.  The best way to ensure that the rent is paid is to tenant the property with the highest quality tenant…a tenant that not only wants to be in the property, but needs to be in the property.  Maslow wrote long ago that one of our top needs as humans is shelter.  From caves to Country Club Hills, people have always sought out adequate places to call home.  And as Morgan Stanley points out, more and more people are choosing to rent that home.

With a growing tenant base, the clear need for housing, a society moving towards rentership, and a populous moving away from buying goods in stores, we feel good not only about our current portfolio position and but also that of our growth strategy.  Do you?

– Eric Workman

The New Renters

November 4, 2011

CNBC recently reported that millions of Americans who lost their homes in foreclosure are driving demand in the rental market.  So much so that Oliver Chang, Morgan Stanley’s head of U.S. housing strategy and research believes it is time for institutions such as hedge funds and private equity to enter the Single Family Rental market.  Please click on the image or link to view!

If the name Oliver Chang sounds familiar, it’s probably because you remember this post from a couple of weeks ago.  The team at MACK has been working very closely with Oliver on this very issue…how can big institutional money sources enter in to the Single Family Rental market?  It’s Olvier’s contention that the only way for institutions to make a successful entry into the market is for them to partner with operators such as MACK.  We, of course, agree!

MACK connects with “A Rentership Society” author at Morgan Stanley Research

October 13, 2011

The real estate team at Morgan Stanley Research recently released a report entitled ‘A Rentership Society’ where they present the fundamental trends driving the strong demand for multifamily and single-family rental housing throughout the country.  Oliver Chang heads up this research group at Morgan Stanley, so the redevelopment and rental professionals at Mack Companies talked with Chang to share their experiences of providing successful single-family rentals over the past 14 years.  View the entire article here:  MACK connects with ‘A Rentership Society’ author at Morgan Stanley Research