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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 …

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 …

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, …

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 …

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 …

Seattle Could Provide Template for National Multifamily Recovery

In the realm of apartment market research, Seattle represents a bellwether of sorts these days, where broader trends and themes can be parsed. Seattle’s economy, population and real estate landscape have grown at rates previously considered impossible in a primary market. The city stands at the veritable intersection of technological and generational change — the corner of Large Cap Tech Boulevard and Millennial Street — and it has developed into the avatar of the infill, wood-frame …

Revenue Volatility: Friend or Foe to San Antonio Multifamily Investors?

During the great multifamily bull market of this passing decade, investors became increasingly comfortable with exposure to highly volatile metropolitan markets. In an era when it was difficult to make a bad investment decision, the most lucrative were, in most cases, located in areas of the country known for their roller-coaster real estate cycles. Indeed, it seemed as though a purchase capitalization rate could never be too low if an asset was located in one of the primary markets. Volatility …

Austin: The Right Place at the Right Time for Multifamily Sector

“After COVID-19, nothing ever will be the same,” has become a common refrain these days. Perhaps for the next decade or so, every important life choice will be made with public health and safety concerns in mind — and the most commonly chosen solutions will be meaningfully different than before.Among the most fundamental life choices subject to this new scrutiny will be where to live, how to make a living and how to safely move about. Many Americans will opt for less densely populated …

Weak Oil Price Outlook Puts Houston Multifamily Sector Back on Its Heels

Houston is less reliant on the oil and gas industry than it once was, and considerable strides have been made to diversify the economy away from the oil patch. Still, the hard reality remains: Houston’s prosperity and hydrocarbons are intrinsically linked. Decoupling one from the other will be devilishly difficult.The world will derive the preponderance of its energy from oil and gas for decades to come, but market share will continue to diminish, and oil and gas revenue inevitably will …

Recession Pays an Unwelcome Visit to Dallas Multifamily Sector

Some places in America are painfully accustomed to economic setbacks. Dallas isn’t among them. This growth market prototype has elevated expansion to an art form and won’t suffer recession gladly.But happily or not, Dallas must share with the rest of the nation the unanticipated discomfort of our pandemic disaster. How is it likely to respond, and what are the ramifications for multifamily investors?It is said that everything is bigger in Texas, and Dallas job losses in the first …

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