Features

Many multifamily real estate investors have moved to the sidelines until price transparency returns and the trajectory of property performance becomes clearer. It is a prudent strategy. Indeed, this period of forced inactivity is, perhaps, better used to reflect on the future and consider which U.S. apartment markets will offer the most attractive opportunities when the moment arrives to test the waters again. Conventional wisdom holds that markets with significant reliance on leisure travel employment will be hardest hit by the pandemic, particularly those with outsized exposure to the cruise industry. It’s hard to refute the logic. But investors who interpret it too literally may miss potentially attractive options. Take Fort Lauderdale, for example. The Broward County labor market has one of the highest exposures in the country to the leisure, hospitality and cruise sectors. More than 3.9 million cruise passengers embarked from the port last year, generating direct employment for about 15,000 residents and indirect employment for tens of thousands more in the lodging, dining and entertainment, air transportation and retail sectors. With the cruise industry taking on water surely investors would be well advised to steer clear of the Gold Coast? Perhaps not. In fact, the statistical impact …

Since the end of the Great Recession, Orlando has been among the country’s fastest-growing economies and strongest multifamily markets. After 2014, metro payroll employment increased at a 3.7 percent compound annual rate, 120 percent faster than the national average. Only Austin surpassed Orlando for payroll growth among the peer group of 50 large metropolitan markets, according to The RED 50, a proprietary econometric model developed by RED Capital Research. Personal income grew about 6.8 percent annually, 45 percent faster than the national average. Apropos of the apartment sector, effective rents advanced at a 5.9 percent annual rate, according to Reis data, surpassed only by Atlanta (6.9 percent), Dallas (6.0 percent) and Nashville (6.2 percent) among growth markets — and not by much. All the while, the sources of Orlando’s prosperity grew more diverse and its labor force more highly skilled. In the past five years, the fastest growing segments of the metro economy were professional, technical and scientific services, air transportation, manufacturing and construction. Indeed, employment growth in the sectors most popularly associated with Orlando — arts and entertainment plus food services and lodging — was outpaced by the finance and insurance industry. Nonetheless, theme parks, resort hotels, leisure service and …