Trends in multifamily development and demand mirror both changing mentalities in a post-recession era and dynamic population shifts. There are an estimated 80 million echo boomers (Americans born between 1980 and 1995) that are beginning to move out of their family homes or college dorm rooms and into a very challenging job market. Most rent because they are either unable to buy or they consider owning a home low on the list of their financial goals at this stage in their lives. Even those older than the echo boomers have changed their ideology as it relates to homeownership after suffering through a collapsed housing market. The result of these shifts has kept the demand for multifamily housing high on both local and national levels. Current apartment developments are also responding to the demand for affordable luxuries. They now offer green efficiencies that will reduce utility bills and access to transit nodes that cut down on gas costs. Amenities such as fitness centers, coffee shops and pools with outdoor areas that allow residents to socialize on-site have become commonplace. In the Greenville market, the downtown apartment activity is bustling. Hughes Investments recently delivered the Riverwalk at Riverplace, a mixed-use development that …
Multifamily
The Milwaukee apartment market continues to enjoy higher occupancies, less concessions and yes, some actual rent growth. The market saw less available units in recent years. As the old law of supply and demand dictates, that drop in the number of available units has led to a significant reduction in concessions, thereby increasing effective rents. In some cases, not only was there an increase in effective rents, but in actual rents at some properties and within certain markets. What are the driving factors and what can we expect going forward? There are a few components at work — more jobs and virtually no new developments. Another important, but less quantifiable factor, is the desire of some potential homeowners to remain renters. When we talk about job growth, we are certainly not talking about a dramatic increase. Still, an increase is always better than a loss. After hemorrhaging jobs in the late 2000s, as the recession gripped the area and the rest of the country, Milwaukee began to rebound in 2010. In fact, according to Manpower International, the area was one of the top job growth areas in the country, ranking sixth in fastest employment growth of the top 100 metropolitan …
The multifamily market in New York City picked up steam in 2011 and is continuing to thrive during the first quarter. Multifamily building sales citywide jumped 33 percent in 2011 compared to 2010 as institutional investors drove the year-over-year jump in dollar volume up by 43 percent. Our company’s research report, the Multifamily Year in Review: New York City 2011, shows that citywide there were 436 multifamily transactions in 2011 consisting of 589 buildings totaling $4.23 billion in gross consideration, compared to 2010, which had 392 multifamily transactions with 442 buildings totaling $2.949 billion in gross consideration. Manhattan south of 96th Street and Brooklyn posted the strongest gains in 2011 versus 2010. Each saw a 25 percent increase in multifamily transaction volume and around 50 percent increase in building sales. Year-over-year multifamily building sales in Northern Manhattan and the Bronx rose 25 percent and 23 percent, respectively, but declined 7 percent in Queens. The pricing environment has shifted dramatically in favor of sellers and prices are ticking up as a result of several fundamental value drivers. Rents have now recovered to pre-financial crisis levels and tenant concessions have all but disappeared. Interest rates for cash-flowing multifamily assets have hit all-time …
Property performance improved meaningfully with both vacancy and concessions trending lower in 2011. Asking rents ticked up 2.7 percent to $1,084 per month during that span. Furthermore, the 6,400 fewer jobs recorded during the first half of 2011 was offset by the hiring of 29,000 workers over the final two quarters. These gains supported a 29.5 percent increase in deal flow to 57 sales. However, the prevalence of small acquisitions caused a 13.2 percent dip in dollar volume to $500.5 million last year. New apartment completions, as well as permits issued, were the lowest annual total on record in more than 15 years. The Inland Empire will follow economic growth patterns more reflective of national trends through 2012 and into the future. It will not be returning to the iconic growth that characterized the region from the early years of the past decade up to 2007, when the last notable expansion firmly cemented the metro area as one of the nation's top economic engines of the time. As the region continues to mature, with vast swaths of land developed over the past decade for infrastructure, housing and distribution centers, one of its key growth drivers, construction, is apt to remain …
Restrained development, an unsettled single-family housing market, and growing rental housing demand are driving a robust turnaround in the Hartford multifamily sector, making the market one of the strongest in the country. Vacancy will fall to less than 3 percent in 2012, enabling property owners to raise rents significantly. Some of the greatest gains will likely occur in the North/West Hartford and South Hartford/North Middlesex submarkets, where vacancy rates are less than 3 percent. Overall, vacancy and rents have likely improved sufficiently to justify construction, and many planned projects may accelerate through the pipeline in the quarters ahead. The track record of recently delivered projects will likely embolden developers. For example, in the North/West Hartford submarket, vacancy fell 60 basis points last year after a 264-unit complex came online. The multifamily sector is also getting a lift from the still-struggling single-family housing market, where sales volume fell 20 percent last year. Mortgages remain hard to obtain, and many would-be homebuyers will remain in rentals for an extended period as a result. The Hartford market continues to attract attention from investors, perhaps to a greater extent than other markets of similar size. A slight decline in transaction velocity over the past …
The apartment market in the Greater Salt Lake area continues to be strong and vibrant. The past two quarters of 2011 demonstrated an upward pressure on rents. Overall occupancy is at 94.9 percent, up from 93 percent in 2010. Vacancy presently hovers around 5 percent and appears as though it will remain so, which is evidence of a tight rental market. These signs enable managers/owners to increase rental rates and drop concession offerings with exception to newly constructed projects during their initial lease up. Apartment development also remains robust in the downtown Salt Lake market where the City Creek project, being developed by the Church of Jesus Christ of Latter Day Saints, will be adding more than 1,000 new units. These units will be a part of a significant redevelopment of several downtown city blocks that will add new office and retail product in addition to multifamily. With this kind of unit increase in the immediate downtown market, nearby small and large projects will soon be able to raise rents as the new units will command the highest rates. The total amount of new units expected to come onto the market in the next year is approximately 1,900, with the …
Multifamily development has come to a near halt in Las Vegas. In 2011, only two market rate properties finished their deliveries with a total of 682 units, most of which had already been completed in 2010. Only one market rate property was started in 2011. This 156-unit project was originally started as for-sale townhomes, but after a foreclosure, the development is being completed by Alliance Residential as a rental property. Other development is limited to affordable or senior housing. We are expecting a limited number of market rate starts this year, but at numbers that will not significantly impact existing inventory. The most active market rate developers in Las Vegas over the past years have been Picerne Real Estate Group, Alliance Residential, Fairfield Residential, Ovation Development, Trammel Crow Residential and Nevada West Development. Fore Property Company has been active in both the market rate and affordable sector, and Nevada Hand remains active in the affordable and senior sector. Between 2003 and 2007, 47 properties totaling 13,483 units were converted to condos. The combination of unsold units from these conversions, as well as the unsold units from properties built as condos during that time, has added 4,625 units to today’s rental …
The Austin multifamily market is extremely strong overall, with the most robust submarkets found in the Central Business District, South Central and Southwest submarkets. Due to the number of previously shelved projects coming back online, potential deliveries in 2012 will likely be around 3,500 units, followed by another 5,500 units or so in 2013. However, there are no major projects scheduled to be completed in 2012 that will have a drastic effect on the market — most of the starts that have taken place will not come on line until the first part of 2013. As a result, the upward push on occupancy and rental rates seen during 2011 will continue throughout 2012 — until the market sees some of these new projects coming online, owners of Austin multifamily properties will continue to be aggressive on rents and not offer concessions. One of the leading factors supporting this focused rise in apartment revenues is Austin’s ranking as one of the top growth markets for jobs. In particular, the CBD and South Central areas have seen an influx of new companies that want to be located in the middle of the action — and, thanks to the employees brought to the …
Memphis, home of the Blues and Elvis Presley’s “Graceland”, is the largest city in the state of Tennessee with a population of 676,646. Tourists are drawn to the downtown Memphis entertainment district, anchored by the world famous Beale Street, NBA basketball with the Memphis Grizzlies, and AAA baseball’s finest ballpark, home of the Memphis Redbirds, the St Louis Cardinals farm team. Coming soon is Bass Pro Shop’s gaming retail store and museum, which will attract outdoors enthusiasts. With more than 50,000 people working in the medical industry, Memphis is internationally recognized for its contribution to the medical field. Located in the Medical District, is St. Jude Children’s Hospital, ranked the No. 3 children’s cancer hospital in the country by U.S. News, Le Bonheur Children’s Hospital nationally ranked in many different specialties, the Regional Medical Center of Memphis, one of the top trauma centers in the country and the University of Tennessee Center for Health Science. With its centralized location in the middle of the country, Memphis is the home of many distribution facilities and hubs, most notably FedEx as well as other Fortune 500 companies. The Memphis Chamber of Commerce expects to add more than 7,000 new jobs in 2012. …
The multifamily market continues to be the strongest performing real estate market in Orange County. With the support of strong fundamentals and forecasts, investors are flocking to multifamily investments, especially properties located in core cities. As the for-sale residential market remains uncertain, much of the Orange County population is choosing to lease, which has been a big driver following the economic recession. The vacancy rate stands at 4.5 percent, which accounts for a 20 basis point drop from the previous quarter’s rate of 4.7 percent and a 140 basis point decline from the 5.9 percent recorded one year earlier. This was the third consecutive quarter that witnessed a decline in vacancy. These rates haven’t been this low since the second quarter of 2008. Although vacancy has dropped considerably since it peaked of 6.4 percent during the third quarter of 2009 through the second quarter of 2010, it remains higher than the low point of 3.2 percent, which occurred in the third quarter of 2007. Rental rates have also increased as vacancies have filled. The average effective monthly rent is $1,488, which represents a slight increase from the $1,478 recorded during the previous quarter and an even bigger increase from the …