Last week we attended the National Multifamily Housing Conference (NMHC) in San Diego. This is the biggest conference focused on the apartment industry (that we know about) all year–and it was the first time Wildhorn has attended.
Coming off of closing on 284 units in Austin last December we viewed this as the unofficial kick off to our acquisitions cycle in 2019, as every broker in the country is there with new deals coming out.
We also viewed attending this event as a bit of an experiment, to evaluate the need for us to go at all. Did it make sense to fly out of state to meet with all the same brokers we can sit with here in our backyard? After all, we are Texas based and Texas focused so would we see benefit from flying to California to chum it up with our fellow Texans?
In short, we’ll be back–and have already started planning the Orlando trip for January 2020. Why? Here are the big takeaways and lessons learned from the conference this year.
Unbelievable relationship building
We talk all the time about the fact we’re in the relationship business. You’re probably sick of hearing us talk about it. But we truly believe it. And the biggest takeaway from the NMHC was how we were able to start and further quality relationships. The dinners, the golf, the meetings, the drinks. From sun-up to sun-down (and beyond) we were talking with folks that will help further our business. We spent time with brokers, our property manager, mentors, other operators, equity firms, title companies. In all of those interactions, we were able to focus on relationship and friendship more than talking deal specifics. For us, it doesn’t get better than that.
Efficiency of meetings
Yes, we could have stayed in Austin and met with the brokers here–which we do a lot already. And its an easy drive to San Antonio and Houston. But to replicate all the meetings and connections we made, it would take us a solid week. In the course of 3 days, we got to meet with all of the folks we referenced above. And in the real world, when everyone in your universe isn’t at the same spot, it would have taken over a week to have that many meetings. And, they wouldn’t have been nearly as fun.
Our Pipeline is full It wasn’t all fun and games. We did talk a lot of business, and know that NMHC is traditionally the time most brokers are taking out new listings. We went with the intention of filling our pipeline of deals to investigate. And we came back successful. Our analysts are currently sorting through 10+ deals across Austin, Houston and San Antonio. Some of these are marketed deals we’d have seen anyway, but there are a couple of off-market/pocket listings we wouldn’t have heard about had we not been there. In a market as competitive as this one, it’s important to turn over all the stones to find one potential deal. Without going to the conference, we feel like a few stones might still be unturned.
Strategic planning for 2019
With Reed and Andrew living in different states, the face to face visits usually occur when Reed is in Texas and we’re visiting our assets, touring new deals and talking with investors. Those days are always packed to the brim–productive but very focused on the present. One unintended benefit of being at the conference this year was the chance for us to sit together, away from the hustle of any specific deal, and get our goals and priorities aligned. We talk every day (usually several times each day), but having an intentional, uninterrupted time to talk about the big picture and what we want to accomplish this year was a massive win for the conference.
Keeping tabs on the market
One curious thing about NMHC is that very few people actually go the conference and sit there to listen to the speakers and panels. Of everyone we spoke with, no one was going to the actual conference–we were all there just to network and meet. That didn’t stop us from picking up on an interesting trend we’re now studying. There seems to be a shift in many operators mentality right now, where they are shifting away from a value-add opportunities and exploring core-plus/stabilized deals. What does this mean? It means that many groups are now looking for longer-term holds on newer deals that have less upside. They are buying newer deals that don’t need work, but will cash flow and appreciate over the next 10 years, rather than try and force the appreciation over the next 2-3 years. While we aren’t shifting away from our value-add focus, it’s interesting to keep a pulse on what’s happening in the marketplace and how various groups are thinking about new deals.
We’re home from the conference exhausted, excited and ready to jump into this pile of potential new deals. 2019 is going to be another big year for Wildhorn and we’re excited to see where we’ll be at next year’s NMHC. Hope to see you there then!