News Column

Neil Kozokoff: Steady Increase in Rental Households Spurs Rapid Growth in Multi-Family Construction

Apr 25 2013 12:00AM

Marketwire

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WEST PALM BEACH, FL -- (Marketwired) -- 04/25/13 -- For Neil Kozokoff, property development, management and investment has remained a promising industry, despite recent issues experienced with the recession and subsequent economic uncertainty. However, as many analysts suggest that the economy is making a steady recovery, leaders in the real estate industry have begun facing other problems -- specifically in the construction of multi-family residencies.

A recent article from CNBC expands on the issue and reveals, "Since 2005, according to the U.S. Census Bureau, every new household formed has been a rental household. The sector has been underbuilt since 2004, so there is a lack of product available, which in turn has caused rents to rise steadily in most markets. New construction is increasing, but it is not even close to outpacing demand." The push for multi-family rentals has become so heavy that many providers of home construction have begun to reestablish their companies to work on projects of the former nature.

Still, as more home builders join the multi-family game, there is still a major gap in providing for the consumer market. CNBC states, "There were just over 200,000 multi-family housing starts in 2012, according to the U.S. Commerce Department, far lower than the annual average of 340,000 over the past decade." According to Neil Kozokoff, this trend presents great opportunity to those involved in the construction and development business. However, he suggests that as the demand grows, builders must act strategically both to meet demand, create a solid return on investment and ensure that developments are not a waste of resources.

One of the ways that builders have strategically approached projects, according to CNBC, is creating greater focus on areas that face the highest demand. The article suggests that these areas include "Atlanta, Charlotte, Chicago, Dallas, Denver, Miami, Orange County, San Francisco and Seattle, all markets where apartment demand is high, despite a recovery in the housing market." As a real estate veteran who has based a great deal of his work in the South Florida area, Neil Kozokoff has witnessed these trends before.

While the media may continue to offer headlines regarding the push for construction, Kozokoff encourages builders to remain strategic and meet the demand with innovation, quality and cost-efficiency. In fact, he suggests that historic trends regarding this kind of consumer response provide enough evidence to help calm those who are panicking about the increased need for multi-family rentals. "Of course there is going to be growth in rentals. It is just like what happened in the early 1940s when automobile manufacturers stopped producing cars and switched to wartime production. No cars were produced in America until the war ended after 1945. Everyone wanted a new car. The auto industry, and America, boomed," Neil Kozokoff concludes.

ABOUT:

Neil Kozokoff is the President of The Parkland Companies, a holding company specializing in property investment, development and management in the notable area of West Palm Beach, Florida. As a professional with a background in real estate law, Neil Kozokoff has had the market proficiency to expertly spearhead many urban development projects. Neil Kozokoff's background in the acquisition, operation and management of large apartment complexes recently led him to join Pensam Capital as a principal. At Pensam Capital, Kozokoff focuses on real estate deal structuring and capital formation.



Source: Marketwire