Multifamily

Stability Will Be Defining Characteristic of Memphis Multifamily Market in 2018

by John Nelson April 16, 2018

Consistency is key, and that’s exactly why investors find Memphis more attractive than ever: the Grind City’s financial and commercial real estate stability. The area has grown into a hub for both the distribution and transportation industries. As the largest economic driver in the state, Memphis International Airport alone injects over $20 billion a year into the region’s economy. Thanks in large part to FedEx, the airport has become the second-busiest cargo airport in the world. FedEx’s presence creates a secondary demand from all retailers as they want to have a large distribution presence in the market. Going High-Tech Marketable growth in the Memphis economy extends beyond the distribution and transportation industries. Sizable expansions at University of Tennessee’s Medical School, St. Jude Children’s Research Hospital, Methodist University Hospital and LeBonehur Children’s Medical Center, as well as the migration of medical device manufacturers such as Smith & Nephew and Medtronic, show how Memphis is not only the Home of the Blues and global shipping, but also a high-tech healthcare hub for the Mid-South region. All this growth has helped propel Memphis’ millennial population, especially 20- to 34-year-olds who make up a high percentage of the city’s workforce. Last year, Memphis marked …

April 16, 2018

Market Reports Multifamily Student Housing Texas Texas Market Reports

Student Housing Developers Infiltrate Secondary Markets

by Taylor Williams April 13, 2018

The National Center for Education Statistics (NCES) reports that about 20.4 million students attended American colleges and universities in 2017. That figure represents an increase of 5.1 million students from 2000 and is expected to exceed 22 million by 2023. As this enrollment growth carries forward, developers of student housing properties have been holding steady volumes of new product on their books. According to CoStar Group, developers have added about 22,000 new units each year since 2010. During that stretch, vacancy for all unit types has not risen above 10 percent and rents have maintained positive growth rates, save for the 12-month period from mid-2013 to mid-2014. Asking rents for studio and one-bedroom units have appreciated the most during this cycle. This suggests that more graduate students, who are more likely to live alone, are clamoring for student housing residences. Larger schools often have limited enrollment, forcing graduate students to consider smaller institutions. As such, secondary markets are gradually beginning to see heavier waves of student housing development. In Texas, this trend appears to still be in its infancy. As for the state’s biggest markets, the University of Texas at Austin is located within a very tight development grid. Lubbock …

April 13, 2018

Market Reports Midwest Midwest Market Reports Multifamily Ohio

Strong Fundamentals Are in Place for Cincinnati’s Multifamily Market

by Kristin Harlow April 12, 2018

The strength of the national multifamily market has been driven by a number of factors, especially job and wage growth. Nationally, annual job growth has been 1.5 percent and annual wage growth has been 2.9 percent, according to the U.S. Bureau of Labor Statistics. Another factor affecting the multifamily market is homeownership. In the United States, homeownership reached 65 percent in 2008, dropped to 60 percent in 2015 and rebounded to 65 percent at the end of 2017, according to the U.S. Census Bureau. Strong demand, low vacancies, good rental growth and a vibrant sales market have characterized the market. During the last 10 years, the millennial population has primarily rented housing and baby boomers have been downsizing to apartments or condos. These trends have contributed to the multifamily market’s strength. We see the millennial sector housing choices changing with much of the generation getting married and starting families. Last year represented the third-best year in history for multifamily property sales volume, according to Dave Lockard, senior vice president in the multifamily brokerage division of CBRE. Another factor affecting multifamily markets is a slowdown in new construction. Higher construction costs and more conservative commercial bank construction financing have led to …

April 12, 2018

Market Reports Multifamily New York Northeast Northeast Market Reports

Manhattan Multifamily Building Sales Slow in 2017 after 2016 Surge

by David Cohen April 11, 2018

In 2017, the multifamily investment sales market in New York City followed the trends seen within the broader market with sales volumes dropping while property values were mixed. The year ended on a high note with regard to contract execution activity, which bodes well for sales volume in 2018. This year, we expect volumes to rise while values bottom out and start to climb by the end of the year as positive movements in fundamentals start to exert upward pressure on property values. With regard to the number of properties sold, there were 1,215 apartment buildings sold last year, down 19 percent from the 1,507 that were sold in 2016. The elevator building sector, which we differentiate from walk-up buildings as a separate asset class, performed better with 235 sales, down 14 percent from the 273 elevator buildings that were sold in 2016. In the walk-up sector, there were 980 sales, down 21 percent from the 1,234 walk-up buildings that were sold in 2016. If we compare the Manhattan submarket to the outer boroughs, we see that activity in the outer boroughs held up much better than in Manhattan. In the outer boroughs, elevator building sales dropped by 13 percent …

April 11, 2018

Market Reports Midwest Midwest Market Reports Minnesota Multifamily Seniors Housing

Future Is Bright for Senior Living Development in the Twin Cities

by Kristin Harlow March 29, 2018

Exciting times are in store for the senior living industry. A massive generation of baby boomers is entering the golden years of retirement and beyond, driving a wave of demand for seniors housing. The U.S. Census Bureau estimates 78 million baby boomers were born between 1946 and 1964. The youngest boomers are 54 this year and the oldest are 72, so we are just eclipsing the front end of the wave. In 2029, just 11 years from now, all baby boomers will be at least 65 years old, with the vast majority beyond age 65. This group will represent 20 percent of the U.S. population, and that is when the wave may start to resemble a tsunami. Strength in numbers Demographers agree that circumstances are favorable for growth in the seniors housing market, and the real estate industry is responding. In the Twin Cities, market conditions are balanced with an adequate supply of seniors housing to handle the first groups of seniors moving in. At this time, we observe that the greatest demand is for independent living versus assisted living, memory care or skilled nursing. Overbuilding has not been an issue in the Twin Cities and most of the Midwest …

March 29, 2018

Market Reports Multifamily Texas Texas Market Reports

Multifamily Occupancy Holds Firm in San Antonio Despite Record Deliveries in 2017

by Taylor Williams March 23, 2018

There’s no question that the San Antonio multifamily market has had the reputation of being the steady tortoise in a race against the more nimble Texas hares of Houston, Dallas and Austin. We all know how the fable ends — the hare, confident of an easy win, takes a nap while the tortoise secures victory. Could 2018 be the year that our “slow and steady” hero finds its place at the top of the Texas market performance? As it stands, the Alamo City is enjoying an apartment occupancy rate of 92.1 percent, which is flat on a year-over-year basis. But given the amount of new supply that entered the market in 2017 — a cycle-high 7,230 units — that’s a remarkable number. We ended 2017 with an average rent of $1.14 per square foot, which is flat compared to third-quarter figures, but that number still represents 3.64 percent growth from the $1.10 average from the fourth quarter of 2016. So what does it mean for the market’s immediate future? The San Antonio construction pipeline continues to be a focal point and as things progressed, there have been some surprises. While 2017 marked the cyclical peak for deliveries, and there has …

March 23, 2018

Indiana Market Reports Midwest Midwest Market Reports Multifamily

Multifamily Urban Infill Development Spreads Into the Suburbs of Indianapolis

by Kristin Harlow March 15, 2018

If you happen to read or listen to Freddie Mac officials, the key economic factor driving housing demand is the labor market. In 2017, the Indiana Economic Development Corp. (IEDC) secured 293 commitments from companies across the country to locate or grow in Indiana. Collectively, this will make for more than $7 billion in new investments and 30,158 new jobs in the coming years, marking the highest annual commitment in IEDC history. Companies currently expanding and adding thousands of jobs throughout the region have been contributing greatly to the growth of the multihousing market in central Indiana. More than 2,380 market-rate apartment units were completed in 2017. Construction doesn’t appear to be slowing down either, as over 2,200 units were under construction at the beginning of 2018. Apartment deliveries soar Central Indiana has experienced a marked increase in overall multifamily deliveries. Between 2014 and 2017, developers delivered approximately 15,000 new units, compared with 13,500 units over the previous 14 years combined. A large majority of the projects are greater than 100 units, particularly the market-rate developments. Lately, most of these projects have contained pockets of amenities or are located near amenities. Downtown Indianapolis was home to one of the more …

March 15, 2018

Market Reports Multifamily Southeast Southeast Market Reports Tennessee

Is Nashville’s Multifamily Market Overbuilt? Maybe, But Not for Long

by John Nelson March 12, 2018

Nashville has set several notable records in recent years for job growth, rent growth, population growth, tourism and tax revenue, among others. But for the multifamily industry, the most notable benchmarks lately have been related to the amount of inventory that has been delivered. However, the more interesting and less obvious data point is the record level of renter demand that Nashville is currently experiencing. As of third-quarter 2017, Nashville led the country in relative net absorption, with 4.9 percent of the existing inventory being absorbed. This equates to approximately 6,300 units. This demand is fueled by incredibly resilient job creation, as Nashville has increased its employed labor force by 20 percent over the last five years — more than 160,000 jobs. With that as the backdrop, the big question on everyone’s mind is the impact of new supply. In short, yes, there are pockets of oversupply, with approximately 8,500 units delivered in 2017 compared with net renter demand of roughly 6,300. However, with urban deliveries projected to drop off 40 percent in 2018, and 80 percent in 2019, and no slowdown in renter demand on the horizon, the current imbalance is likely to correct itself in relatively short order. …

March 12, 2018

California Multifamily Western

HCP to Transition Operations of 24 Seniors Communities from Brookdale to Atria

by Nellie Day March 7, 2018

IRVINE, CALIF. — Irvine-based REIT HCP (NYSE: HCP) and Louisville-based operator Atria Senior Living have agreed to transfer operations of 24 HCP-owned seniors housing properties to Atria. Brookdale Senior Living currently operates the properties. The transitions will begin this month and are expected to be completed by September, as the required regulatory approvals are obtained.

March 7, 2018

California Multifamily Student Housing Western

Campus Advantage Awarded Management of Two Student Housing Communities in California

by Nellie Day March 7, 2018

DAVIS AND FULLERTON, CALIF. — Campus Advantage has been awarded management of two student housing communities in California.bThe properties include College Square, a 448-bed community located within walking distance of the University of California, Davis; and University Village, a 305-bed community located near California State University, Fullerton. Both properties are garden-style. College Square offers shared amenities including three swimming pools, a fitness center, grilling and picnic area, 24-hour laundry facilities, study lounge and business center. Shared amenities at University Village include onsite food service, a swimming pool, fitness center, laundry facilities, bicycle storage, package lockers, Wi-Fi hotspots throughout common areas and a recreational room with billiards, foosball, a big screen TV and lounge areas. Renovations are planned for common areas and units, and Catalyst is set to perform full rebrands at both properties.

March 7, 2018

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