Ella Neyland, president of Steadfast Income REIT and Steadfast Apartment REIT, joined REIT.com for a video interview during REITWeek 2015: NAREIT’s Investor Forum, held in New York.
Steadfast Income and Steadfast Apartment are public non-listed REITs. Neyland discussed the growth potential in Steadfast’s area of focus: moderate-income apartments located in secondary markets.
“I think it’s tremendous. We believe the economy and the demographics are in essence creating a nation of renters,” Neyland said. The millennial generation is marrying later, having children later and picking apartment living as a lifestyle choice, she added.
At the same time, Neyland noted that millennials are generally carrying student debt and have average incomes of $35,000. As a result, they are seeking moderately priced apartments that they can afford themselves without taking on a roommate. Demand for such apartments currently exceeds supply, Neyland said.
Steadfast has been an active buyer of apartments in the center of the United States, Neyland noted. Acquisitions totaled $1 billion in 2013 and $500 million in 2014.
“We tend to see pretty much all that’s for sale in the U.S. apartment market because we are such a big buyer,” she said. “We know our markets and we can pretty well pick and choose what we want. There’s a huge inventory.”
Meanwhile, Neyland observed that the decision matrix that people go through when they pick an apartment has not changed in the 35 years she has been in the business. Location is the first priority, followed by price point. “We focus on location and delivering a quality apartment at a price most people can afford, which is about one-third of their take-home pay,” she said.
As for amenities, Neyland pointed out the pet parks are especially popular with millennials.