Sean Burton, CEO, Cityview
Cautious Optimism for Multifamily
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Guest: Sean Burton, CEO, Cityview
Cityview’s Map: Where Capital Is Flowing
Sean Burton runs a fully integrated multifamily platform: Cityview develops, acquires, and manages apartments across supply-constrained U.S. markets, with deep West Coast exposure and outposts in Dallas, Denver, and the East Coast.
The firm built its model the hard way—by taking assets back in the GFC, deciding it “wasn’t close enough to the real estate,” and spending a decade integrating development, construction management, and property management in-house. The result is a 200-person owner-operator with line-of-sight from entitlement through stabilized operations that has developed or owned over 20,000 units valued at over $6.5 billion.
For sponsors and LPs, Burton’s vantage point is valuable: Cityview is simultaneously raising, building, operating, and selling across a 40-asset portfolio. That produces a clean read on what capital will fund, what costs are doing, and which policies actually move supply.
Debt Markets: Spreads Have Washed Out
The most immediate tailwind is on the liability side. Private credit raised vast sums with promises to deploy; now those managers “are really scrambling to do that.” Spreads have compressed to cycle lows—even by long-tenured practitioners’ standards—while large banks, sidelined by capital rules, are “running back into the space.” For borrowers with relationships and credible pipelines, that mix is pushing all-in costs down and improving returns.
The caveat is macro: underwriting still hinges on the long end of the curve. Rate-cut chatter is noise unless it changes the 10-year; that remains the industry’s risk-free anchor and the practical link to cap rates.
Equity Sentiment: From First-Quarter Thaw to Post-Tariff Pragmatism
Fundraising whipsawed this year (2025). Optimism built early; geopolitics and “Liberation Day” headlines knocked some LPs back to the sidelines—particularly internationals. Since summer, flows have stabilized. Two shifts matter:
- Development is bankable again in supply-constrained markets as value-add competition and tighter cap rates narrow the gap to build yields. Insurance capital, bulge-bracket managers (the largest of the large banks or asset managers), and selective foreign LPs are leaning in.
- Coastal markets are back in the conversation. After Covid-era “California is uninvestable” narratives, Burton reports LPs are reassessing the resilience of constrained, high-demand submarkets.
Costs, Tariffs, and Immigration: Risk Management over Drama
Burton’s team pressure-tested a 500-unit West LA project against worst-case tariff scenarios by calling 17 top subs and materials providers directly. The outcome: roughly +2.7% on hard costs and +1.5% on total budget—material but hardly thesis-breaking.
At the same time, fewer new projects are starting, so subcontractors are competing harder for work and materials prices are easing — which helps offset the cost pressures everyone’s worried about.
Immigration enforcement created anxiety on jobsites but produced minimal disruption on large, union-compliant multifamily builds.
The lesson for sponsors: interrogate supply chains one layer deeper than your GC and quantify impacts deal-by-deal. In many cases the “big scary” is a rounding error next to land, entitlement time, and capital cost.
Opportunity Zones: The Rolling, Evergreen Version Starts in 2027
Cityview incubated a $1B Opportunity Zone program during the first regime and expects to re-launch in 2027, when the new, broadened framework begins. Two features matter for investor pipelines:
- Evergreen/rolling design replaces a sunset cliff, enabling steadier programmatic planning.
- Expanded eligible income categories (beyond capital gains) are anticipated once Treasury finalizes regulations.
Sponsors should treat 2026 as a bridge year and align site control, design, and capital partnerships now to hit the 2027 window with shovel-ready projects.
Policy and the Cost of Capital: Beware the “Sugar Rush”
Burton is pragmatic about deregulation and lower policy rates: more liquidity lowers financing costs and ultimately rents—but could overshoot. If easier credit lifts inflation fears, the 10-year treasury could rise, blunting the benefit. Institutional investors should welcome the return of liquidity, but model a range of outcomes for interest rates and cap rates instead of assuming a smooth recovery.
Underwriting Discipline: Financial Engineering is Not a Strategy
The most actionable part of the conversation is Burton’s insistence on fundamentals over financial engineering. In his words: “it really does start with the real estate.” Teams that chase structures—or build value stories around fee waterfalls, hybrids, or momentary rate arbitrage—inherit fragility when regimes change. The sustainable edge is still site quality, transit and job access, and demonstrable supply constraint.
Los Angeles: The Policy Spread
If capital is global, local politics price assets more than many pro formas admit. Investors who “love LA” balk at uncompensated political risk: rising fees, shifting rules, and entitlement uncertainty.
The city can narrow its risk spread by lowering soft costs and delivering predictable timelines. San Diego’s “Complete Communities” framework is a working case study: clear rules, 30-day comments, and mayoral support—paired with meaningful affordability requirements—are unlocking 1,000-unit pipelines for platforms like Cityview. Predictability, not subsidies, is doing the heavy lift.
Signals to Watch (Next 12–18 Months)
- Demand indicators: job creation by sector, consumer spend, white-collar hiring (Bay Area/IPOs), and migration into select Sun Belt nodes.
- The 10-year treasury: more decisive for cap rates and development feasibility than near-term policy cuts.
- Agency reform path: potential Fannie/Freddie privatization and its implications for multifamily liquidity and cost.
- Starts and costs: continued slowdown in starts should relieve input costs; track sub bids and lead times monthly.
- Local entitlement velocity: municipalities emulating San Diego’s timeline discipline will attract outsized capital.
What Sophisticated CRE Participants Should Do Now
- Stage development in true supply-constraints where entitlement risk is manageable and rent elasticity is favorable.
- Exploit today’s spread compression—but size interest-rate hedge/exit scenarios off the 10-year, not the dots.
- Re-engage HNW/Opportunity Zone channels with an explicit 2027 go-to-market plan; 2026 is for control and design.
- Price policy risk explicitly in hurdle rates; where cities cannot deliver predictability, pivot to jurisdictions that can.
- Enforce fundamentals-first governance in IC memos - deal quality over structure cleverness.
The through-line of Burton’s view is sober optimism: capital is returning, costs are manageable, and the demand story for housing is intact - provided teams keep their eye on the 10-year and underwrite to the dirt, not the spreadsheet.
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