Investors looking for financially sound real estate investments are eyeing Iowa as a place in which to invest, said panelists in a recent virtual discussion hosted by the West Des Moines Chamber of Commerce.
Developers on the panel said they have received numerous queries in the past six months from investors interested in buying property that isn’t listed for sale.
The following is a snippet of the conversation:
Kyle Gamble, executive vice president of Hubbell Realty Co.: There are a tremendous [number] of outside-of-the-state investors looking in Iowa for better returns. We haven’t seen the cap rate compression that has [occurred] on the coasts. Those buyers are driven here to see if they can acquire property with slightly higher cap rates, and drive better returns. Also, the stability and predictability of the Central Iowa and Greater Iowa market is something that is attractive to customers. There is a pattern of success here; there’s a pattern of growth. With that comes a demand for good, quality property.
Chris Costa, president and CEO of Knapp Properties: To add to that, we have an apartment project in West Des Moines – 120 units. In the past six weeks, I have fielded 10 to 15 calls from entities in the Midwest and nationally, that have identified West Des Moines multifamily as a real estate asset that they want to own. And it’s not just our property they are after; they are after all kinds of West Des Moines properties. The stability in our market certainly helps, but the cap rates that these investors are willing to pay … they open my eyes every time that they call and tell me what range they are going to be in. Our challenge is, if we sell a good asset, what other asset are we going to get into if we are going to be real estate investors.
Richard Hurd, founder and president of Hurd Real Estate: We have sold to unsolicited buyers a number of properties in the last few months. I can’t tell you how many inquiries we have on a daily or weekly basis because basically, what we own is investment properties. … We’ve never really seen this type of penetration into the marketplace from out-of-state inquiries to buy things. We’ve sold to California buyers, New York buyers, Colorado. There’s a lot of money chasing real estate in Central Iowa right now for all the reasons Chris and Kyle mentioned. … We do have a stable market here. We don’t have the highs and lows [experienced by other parts of the country] and I think there’s some value in that for people that are bringing their money in from the coasts.
Also on the panel were Kevin Crowley, chief operations officer and manger of NAI Iowa Realty Commercial and Paul Rupprecht, president if R&R Real Estate Advisors. The hourlong program included discussion on topics that ranged from senior housing and mixed-use developments to office, retail and industrial sectors and can be viewed on the West Des Moines chamber’s YouTube page.
