“It’s Time to Build”: A Conversation with Bryan Lamb, Executive Vice President – Multifamily Sector Leader

The multifamily market is at a crossroads. Rising construction costs, shifting renter expectations, and uncertainty in the capital markets have developers asking, "What’s next?" 

For Bryan Lamb, our Executive Vice President – Multifamily Sector Leader, the answer is clear: it’s time to build.  

Read on as Bryan shares his take on modular & prototype innovation, affordability challenges, and the long-term role multifamily will play in U.S. housing. From hot takes on oversupply headlines to a warning about the overlooked implications of privatizing Fannie and Freddie, Bryan offers an unfiltered look at where the industry is headed…and why waiting on the sidelines isn’t an option. 

Q: What’s the biggest opportunity for innovation in multifamily development right now? 

The spectrum of cost-effective construction includes the use of prototypes—from a building unit to a kitchen to a bath—and understanding how to consistently deliver new products better, faster and more cost effectively. 

Similarly with modular construction, which represented about nine percent of multifamily starts last year – and growing. Modular generally involves pre-fab units or components of units (i.e. kitchens & baths) made in a factory, delivered to the site and dropped into the program. Ongoing legislative and regulatory reviews and changes around lending and product standards will likely accelerate this growth in the years ahead. 

To me, the bigger picture is clear: there’s a lack of affordable housing. The solution is to get more housing into the system through these types of innovative solutions. The more supply, the lower the pricing for all housing – luxury to affordable. So, the solution is build more and to amplify efforts to do that in a cheaper, better, faster model that reaches the thickest part of the demand curve. Meet renters at their price point with the right product, and we’ll generate more return for Ryan and its investor partners. 

There’s already been a lot of innovation in pricing—multifamily has gone the way of airlines and hotels with dynamic pricing. That’s grown significantly in the last 5–10 years. The next wave is construction technology. 

Q: How do you see renter expectations changing, and how is the industry keeping up—or falling behind? 

The industry is doing a pretty good job overall. Multifamily used to be an afterthought in capital markets; office was the focus. Now multifamily is institutional scale, and the product has gotten so much better. 

Look at the shift in homeownership. It peaked at about 70% in 2004 and has been in the low 60s for the last 10 years. Buying a home has become increasingly unaffordable for many, and the rental product pool is now a much higher quality and more consistent than it was 20 years ago. There’s now a “standard kit of parts” every Class A apartment is expected to deliver—modern finishes, marketable amenities, and the conveniences renters value—and you can find it anywhere from Denver to Tampa. That consistency simply wasn’t there before, and it underscores how the industry is adapting to meet evolving expectations. 

Where it falls short is affordability. Historically, rent, housing costs and utilities shouldn’t exceed 30–32% of income. But now, that metric is out of whack in a lot of US cities. People are paying close to 50% in some markets, and it challenges their ability to do pay down student loans, launch a business or start a family.  Wages have grown a bit in recent years, but the cost of living has risen faster.  

Families add another layer. There are a lot of families with kids who rent by necessity, but very few three- or four-bedroom units are being built. The industry’s response has been single-family rental, but those aren’t cheap, and they’re often located further from jobs and schools. Developers need incentives to deliver larger units in target areas. Bigger units come with higher construction costs but lower rental rates per square-foot, and so it’s tough to make the math work without subsidies. 

Housing has historically been the strongest, most recession asset class as it is a fundamental human need. Retail, Hotel and Office demand fluctuates dramatically, and warehouses can be susceptible to supply chain shifts, but through every recession, housing has proven the most resilient and the quickest to bounce back. 

Q: What’s a trend nobody is paying enough attention to that will shape multifamily five years from now? 

The potential privatization of Fannie Mae and Freddie Mac. After the Global Financial Crisis, they became federalized, and their lending volume went through the roof. That drove liquidity in the market and kept lending costs low.  When the agencies were last private, their lending volumes were a fraction of their current levels. 

If they’re privatized again—I’m not sure if that’s good or bad—but it will change things. Right now, they prioritize certain incentives, like discounts for green building codes and affordable housing, because the government has made those a priority. In a private market, those incentives could disappear. Lending standards could shift. And if they become purely private, they could just decide whether or not to be in the market at all. That lack of governance could create volatility and depress asset values. 

It’s never been done at this scale before. Good or bad, it would have an impact. 

Q: What’s your hot take on the multifamily market right now…something you believe that most people don’t? 

It’s time to build. 

There’s too much capital chasing phantom opportunities. Around 70% of multifamily private equity capital raised in the last few years hasn’t been deployed, as everyone has been waiting for ‘distressed’ buying opportunities – which, generally speaking, haven’t materialized and very likely won’t. 

Nationally, cap rates are around 5.25% and borrowing rates for multifamily are close to 6.0%.  So investors and operators are buying with negative leverage which is counter to the fundamental idea of real estate investing.    On the other hand, because there is not enough capital in the system and development starts have become scarce, there is a return premium to be made with development of 150 to 175 basis points.  So, instead of buying at a 5.25% return, you can build to a 6.75% to 7.0%. Yes, it’s a higher relative risk, but you’re investing into a resilient and growing sector with a supply shortage. In 18–24 months, the economy will be screaming for housing, and that’s when investors who commit to development now will see the opportunity to harvest a return. 

My take is don’t wait. It’s time to build a thoughtful, lower-cost wood frame product. Towers aren’t getting financed, but suburban (and urban) wood-frame deals are still viable. 

Q: Finish this sentence: In 10 years, multifamily will be… 

…Over 40% of the U.S. housing supply. 

Homeownership is already down to 64% or so and will likely keep dropping to levels not seen in 50 years. Multifamily rental products are going to become an increasingly bigger part of the housing supply, by both need and choice. The costs of homeownership from point of entry to ownership (i.e. taxes, insurance, maintenance, etc.) continue to get higher and more out of reach for average Americans, and fewer people are staying in one place long enough to pay off their mortgages entirely. The mentality of home ownership has shifted. Renting is increasingly seen as a smart, long-term option. 

Q: What drew you to Ryan, and how do you want to make your mark here in multifamily? 

First, the people. Their work ethic and values stood out to me. Second, Ryan is an unapologetically pure-play developer. We find land and build buildings. Not many companies can say they’ve been doing that consistently, across the country, for as long as Ryan. 

The multifamily platform here is a sleeping giant. We have the engine, the infrastructure and the legacy. My goal is to help Ryan be seen by the capital markets as a national multifamily platform built on the unique strengths of our local offices and relationships. 

Q: What’s the biggest leadership lesson you’ve carried with you so far?

There’s no one-size-fits-all approach to management. You have to meet people where they are. With a big team, the path forward looks different for everyone, and part of leadership is balancing flexibility with direction. 

Also, there’s a difference between expertise and wisdom. Expertise can be gained through study; wisdom comes from experience—having seen things before and drawing lessons that you can apply in the future. 

Q: What advice would you give young professionals entering multifamily today? 

There’s no real estate on a spreadsheet. Get out. Walk properties. Sit in construction trailers. Understand the customer and the product. 

In our world, you actually have two customers: the capital markets and the renter. Finance classes will teach you how to deliver returns on paper. But you also need to understand why people want to live in a certain place and what they’re looking for in a home. Put yourself in renters’ shoes. That’s where real learning happens. And, with that depth of understanding you can deliver outsized returns to your capital partners.