The Rent Roll with Jay Parsons EP#40 David Schwartz | Contrarian Apartment Investing 101
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Jun 26, 2025 David Schwartz, co-founder and CEO of Waterton, shares his insights from over 35 years in multifamily real estate. He discusses the evolution of apartment perceptions and how they transformed into attractive investments post-COVID. The conversation dives into contrarian investment strategies, the differences between coastal and Sun Belt markets, and the impact of housing legislation, particularly in New York City. Schwartz also highlights the importance of adapting to market changes and navigating regulatory risks in major urban centers.
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David's Multifamily Origin Story
- David Schwartz started in multifamily in 1986 at Amly, focusing on mispriced Sunbelt assets.
- He evolved by learning during economic turmoil, setting the stage for his long career in contrarian investing.
Institutions' Initial Apartment Bias
- Institutions originally viewed apartments as non-credit tenants with short leases, not a stable investment.
- Over time, multifamily gained favor due to annual lease resets and higher cap rates than other asset classes.
Contrarian Investing Cycles Explained
- Contrarian investing means buying in markets with good supply-demand despite capital flight due to negative perception.
- Markets cycle: Sunbelt was out-of-favor early on; now top coastal markets face regulatory headwinds flipping capital flows.