Cleveland, Milwaukee & St. Louis Multifamily Forecasts Indicate Case for Caution

In earlier research, we found that investors may find advantageous risk and reward tradeoffs during the pandemic in often overlooked Midwest secondary markets. For the most part, average rent and occupancy metrics in these markets continued to rise throughout the summer, recession notwithstanding. Together, their inviting cap rates, rising NOI and low historic income volatility form a fairly compelling investment predicate. We also found that positive performance attributes were not limited …

November 19, 2020Content Partner, Heartland Feature Archive, Lument, Midwest, Missouri, Multifamily, Ohio, RED Capital Group, Wisconsin

Slow and Steady Wins the Race: The Case for Multifamily in Cincinnati and Detroit

Investors favor multifamily markets with brisk population growth and meaningful barriers to entry. But can a case be made in turbulent times for slow-growth Midwest cities characterized by weak entry barriers? View higher resolution version of chart above here. Midwest metro areas with relatively healthy demographic growth — Columbus, Indianapolis and Kansas City come to mind — have posted constructive performance trends during the pandemic recession so far, particularly with respect …

November 12, 2020Content Partner, Heartland Feature Archive, Lument, Michigan, Midwest, Multifamily, Ohio, RED Capital Group

Secondary Midwest Markets: Investor Refuge or Flavor of the Month?

More than a few column inches in multifamily media this year were dedicated to the implications of coronavirus on the housing preferences of renter households. Many theorize that the pandemic is leading householders to reexamine their attachment to urban life and consider suburban alternatives that offer larger floor plans, better schools, free parking and unit access without an elevator ride. Available data suggest there is something to this notion. Occupancy and rent in core urban …

November 5, 2020Content Partner, Heartland Feature Archive, Indiana, Lument, Midwest, Missouri, Multifamily, Ohio, RED Capital Group

Rents Weaken, Investors Stay Active in San Diego Multifamily Market

By Daniel J. Hogan The economic impact of the COVID-19 pandemic has been felt more severely in Southern California than in most areas of the country. The Southland’s high concentration of employment in the tourism and entertainment sectors made it especially vulnerable to the effects of social distancing protocols and the reluctance of many to board commercial aircraft. Not only were job losses particularly acute in the initial months of the pandemic — the subsequent recovery has been …

October 5, 2020California, Content Partner, Features, Lument, Multifamily, RED Capital Group, Western, Western Feature Archive

In Search of Relative Value in Orange County’s Apartment Sector

Orange County offers residents all the key elements of the American dream. Its virtues are numerous and faults few. Indeed, Moody’s Analytics ranks the quality of life in the OC 10th highest among the 378 U.S. metros it reports on, just a half-step behind leaders Santa Barbara and Santa Cruz. Orange County is a terrific place to live, but is it a good place to invest? Gauging by observed capitalization rate trends, one may conclude that county apartment properties are highly prized gems. …

September 24, 2020California, Content Partner, Lument, Multifamily, RED Capital Group, Western, Western Feature Archive, Western Market Reports

The Inland Empire: A Rare 2020 Apartment Sector Success Story

Someone once remarked that eighty percent of success in life is just showing up. Human experience verifies that being in the right place at the right time often is the intangible ingredient that leads to triumph. The strong performance this year of the Inland Empire multifamily market is a variation on this theme. During the pandemic, many renters sought refuge from the high density and high costs associated with big city life, and the work-from-home phenomenon made this objective feasible. For …

September 15, 2020California, Content Partner, Lument, Multifamily, RED Capital Group, Western, Western Feature Archive

Coming Attraction: The Great Los Angeles Multifamily Recovery

Reducing the Los Angeles economy to the entertainment industry would be a serious mistake. In fact, the L.A. labor market is highly diversified with world-class healthcare, professional services, biotech and technology clusters providing co-sector leadership — no one-trick pony is this. Nonetheless, the entertainment industry is the single element that separates this metro economy from all others, and its tentacles are long. In its absence, the metro’s financial and professional …

September 9, 2020California, Content Partner, Features, Lument, Multifamily, RED Capital Group, Western, Western Feature Archive

Rumors of the Death of Silicon Valley’s Apartment Market are Greatly Exaggerated

Some stories are just too good not to be true. This may explain in part the outpouring of reports regarding population outflows from the San Francisco Bay Area. Multiple mid-August articles in national newspapers took up the ongoing Silicon Valley exodus. These articles make a convincing case that the COVID-19 pandemic and increased opportunities to work remotely — particularly in the high-tech industry — are prompting many Bay Area residents to consider relocating to more affordable areas, …

August 24, 2020California, Content Partner, Features, Lument, Multifamily, RED Capital Group, Western, Western Feature Archive

San Francisco Multifamily Trends: The Downside of Demand Inelasticity

In economics, the sensitivity of aggregate demand for a product or service to changes in price is defined as its “elasticity.” The elasticity of demand for nonessential goods or goods with a number of ready substitutes is high. Even a small increase in price will produce a large decrease in demand. Conversely, a relatively large price change in the cost of an essential or prized luxury good for which few substitutes exist may have little effect on demand for it. San Francisco real estate …

August 13, 2020California, Content Partner, Features, Lument, Multifamily, RED Capital Group, Western, Western Feature Archive

Portland, Oregon Multifamily Fundamentals Wobble, but Remain Healthy Overall in June

Five months into the pandemic, fissures are beginning to form in the foundation of the multifamily market. Through the spring leasing season, liquidity from enhanced unemployment insurance benefits and a yearning for stability in uncertain times were enough to maintain occupancy near pre-coronavirus levels and to provide something of a buttress for rents. As spring turned to summer, however, winds seemed to change direction, tenant patience began to fray and property performance waned. West …

July 30, 2020Content Partner, Features, Lument, Multifamily, Oregon, RED Capital Group, Western