In November, Berkadia Affordable Housing attended AHF Live, the nation’s leading Affordable Housing event. This year Berkadia had 30 people from the Affordable platform in attendance. They shared insights, made new connections, and strengthened relationships with clients and partners they’ve known for years. Considering the volatility in the commercial real estate market with inflation, rising interest rates and disruptions to the capital markets, it was an important time to have honest conversations about market conditions and share insights on emerging opportunities.
Berkadia returned to Chicago as a repeat sponsor of AHF Live’s Women in Affordable Housing Luncheon, an event that provides networking opportunities for women at all stages of their careers.
Heather Olson, Managing Director, kicked off the event by reflecting on her early years in the industry, “I remember my first couple of years attending conferences, I spent more time either hiding in the corner on my phone ‘checking emails’ or spending an few extra minutes in the bathroom. The networking that comes with this event and industry can be very overwhelming… If you find yourself out in the hallways or at the cocktail reception and overwhelmed by the experience, find me or anyone else here from Berkadia. We got you.”
Olson went on to stress the importance of networking and mentorship. Affordable Housing transactions can be complex – it takes a lot of people with different backgrounds to move the needle that gets Affordable Housing built. The information exchange over the course of AHF Live will be invaluable to individuals growing their careers and to the vitality of communities.
Zenzi Reeves SVP, Asset Management, continued to represent Berkadia Affordable Housing as a panelist on the Navigating Rising Construction Costs Panel alongside other Affordable Housing industry experts. The panelists shared their perspectives from development, construction, and investment backgrounds. They discussed strategies to combat inflationary pressures, labor shortages, supply-chain delays, and other construction challenges. Reeves outlined several paths that developers can take to address these challenges, which include:
- Secure a large percentage of subcontractor buyout prior to closing or shortly thereafter to reduce the risk of price increases post-closing
- Procure materials with long lead times early to reduce critical path delays for materials with supply chain issues
- Ensure appropriate cushion in the construction budget through an increased contingency or a buffer line item to address inflationary pressure
- Run sensitivity tests during underwriting to include construction delays, interest rate and operating expense increases to determine project resiliency under continued stressed market conditions
Berkadia continues to lead the industry with real-time market insights and technical expertise. To learn more about Berkadia’s economic insights and hear from the people leading the charge at Berkadia Affordable Housing, connect with us.