Lument

Florida markets typically perform well during flush economic times and the current cycle isn’t an exception. Blessed with the fastest growing population east of the Rockies and a business-friendly tax and operating cost environment, Florida is one of the first alternatives multifamily developers and investors look to when the primary markets begin to feel crowded. True to form, Florida experienced record investment sales volume in each of the past two years, and 2018 is shaping up to meet or exceed last year’s total. Acquisition cap rates continue to track lower, with asset prices reaching new highs. By the same token, the supply pipeline is building and occupancy is beginning to erode at the margin. Nearly 70,000 units in 300 projects are under construction across the state and another 375 or more projects are proposed. At least 40,000 new units will be delivered this year, and vintages of similar magnitude can be expected in 2019 and 2020. Can the Sunshine State property performance and investment returns continue to sizzle under these conditions? Strong Job Growth in Jacksonville and Tampa Keep Apartment Markets on Even Keel To date, Jacksonville and Tampa have exhibited the greatest resiliency among the six Florida markets that …

As the real estate cycle enters the late innings, multifamily investors increasingly are seeking alternatives to high-cost coastal metros but remain unwilling to sacrifice the property market liquidity found in the primary markets. Many are finding the right balance of opportunity and liquidity in the Mid-Atlantic States, where cap rates are often higher than in the “favored five” markets and value-add opportunities in strategically located Class B properties abound. RED Capital Research (RCR) performance models suggest that the Mid-Atlantic’s season in the sun has longer to run. Philadelphia Apartment Market Ranks Second Among the Top 50 U.S Markets for Risk-Adjusted Returns Sales of Philadelphia apartments topped $2 billion during the 12-month period ending in June, a 125 percent increase over the year-earlier period. Fund and trust buyers dominated trade, concentrating on urban mid-rise and suburban garden value-add plays at mid-5 percent to low-6 percent cap rates. Investors penciled IRRs in the mid-6 percent range for Class A assets, and the low-7 percent area for value-adds. The metro economy has performed well since 2015 — and posted accelerating gains in the spring and summer. RED Research models forecast further above-trend payroll job creation through 2019, before higher interest rates curb growth. …