I love going through and kind of looking at multiple markets and understanding what those differences are and how they exist, and what’s really true about them.
Two of the key markets that I really like to analyze personally, and we discuss a lot of this also internally at the business, is the Midwest market versus kind of that southeast Sunbelt market. And so what we find over and over again is the Midwest Rust Belt, you know, kind of that Midwest mindset is significantly different from the Sunbelt, where you have high population growth versus the Midwest, where you have kind of a little bit more stagnant.
But also, what the Midwest delivers are amazing cashflow opportunities, whereas, in the Southwest, we’re looking at a market that’s more of an appreciation-based market.
So, a little bit less cash flow, perhaps a little bit more appreciation, whereas in the Midwest… If we consider Cleveland as our subject market that we’re discussing today. So, here what we have is an amazing opportunity due to the limited amount of new units coming online.
You have a limited amount of old units being modernized. So, that puts us in a perfect position to be a market maker. By modernizing units, we’re able to play right in that middle-market segment and bring and deliver results that are quite unique within that submarket.
Now, if we look at the Sunbelt, the Sunbelt has a lot of vintage multifamily property, maybe a little bit smaller door quantity in regards to property sizes and swatches versus the Midwest. However, there is an abundant amount of population growth, which is driving rent prices sky-high.
And so, because you have less land and because you have such this mass migration of population to the southeast, what’s going on is that you have big appreciation on cost per door. So it gives us this middle-market opportunity, just like we have in the Midwest, specifically the Cleveland market that we’ve discussed today.