For our latest Expert Insights series, we had the pleasure of chatting with Kyle A. Keelan, Managing Partner and Co-Founder of The Multifamily Firm. Having graduated from the University of South Florida with a bachelor’s degree in Economics, he now specializes in performing brokerage and portfolio management activities for individual and institutional owners of multifamily real estate assets.
We asked Kyle to tell us more about his passion for real estate, what he thinks about the current state of the industry and where he thinks it will go next. Read on to find out more.
Q: Could you start by telling us a little bit about your background and why you chose a career in real estate?
My background is in asset management, mutual funds, etc. I had a prior corporate career with Transamerica Asset Management. Our division developed Mutual Fund products sold through financial planners and wire house firms. Our specialty was being a “manager of manager”, hiring portfolio managers from other well-known firms then layering in their specialty with other managers to create a fund of funds product. Upon leaving Transamerica I had a desire to learn about “hard assets” (real estate) and how different asset classes interact and correlate financially.
Q: How have you seen the industry evolve in the past years?
Regarding the product, Multifamily demand continues to outpace supply in most Florida markets and investors seem willing to accept lower, more compressed returns. Furthermore, large yield investors such as pensions, and insurance companies seem increasingly willing to own or finance hard assets, although rents and values have already gone up substantially. Also, small investors, particularly those in need of a 1031 (capital gain deferred) transaction have continued placing assets in new deals. Regarding the brokerage business, technology and data management continue to evolve and companies that embrace technology should expect positive results.
Q: Where do you see it going in the future?
Further implementation of automation and technology to cultivate and manage customer relationships. Also, the ability to present credible and reliable data on rental rates, expenses, yields, and valuation will be key. Brokerage firms that specialize by segment in growing market regions, have a potential competitive advantage or potential ability to gain market share. Finally, brokerage models need to evolve and justify their cost or business model to the individual agents.
Q: What is your general assessment for the real estate market in 2019? Have you spotted some interesting market trends?
The multifamily segment in Florida has performed very well. Individual owners are seeing substantial capital appreciation in their overall investment returns; in some cases, it has exceeded their yield returns.
Q: How has the evolution of online marketing impacted the commercial real estate industry?
It has created an opportunity to level the playing field with respect to distribution. Distribution can be to anywhere and to anyone, regardless of the size of the company. Also, this has created significant economies of scale with the use of technology to create marketing material. Our firm has 2 employees that do everything, helped by the fact that we use simple online tools to create and disseminate marketing/financial information for the properties we sell.
Q: Do you think there’s anything that you believe everyone in this industry should be working towards?
Not at this time. I believe, independent, entrepreneurial thinking should be the focus. Industry collaboration to solve a “challenge” can ultimately evolve into unnecessary regulation and should that occur the small players could be negatively affected.