Multifamily

Commercial real estate sectors in secondary and tertiary markets often suffer from a lack of current, comprehensive data and metrics. Until a few years ago, the multifamily market of the Rio Grande Valley (RGV) was no exception. Much of the region’s multifamily product consists of “clusters” of fourplexes. In many cases, different investors own different units within these properties, which generally do not have management and leasing offices with hard data. Consequently, for years multifamily developers and brokers in Hidalgo and Cameron counties operated without reliable information on their market, generally ceding to the ideas that it was overbuilt. Turns out they were incorrect. Year-over-year rent growth in this market tends to be flat. Fluctuations are short-lived and back-and-forth in nature. But beginning in 2015 and carrying over into 2016, multifamily players in the RGV began to realize that their market was not overbuilt and that in fact, demand for better product was rising. Volatile Vacancy To better grasp the ebbs and flows of this market, we revert to 2008 and pre-recession data. To simplify our analysis, we use the McAllen-Edinburg-Mission MSA as a proxy for the region. In 2008, multifamily vacancy stood at approximately 6 percent. By 2011, when …