Apartment Investment: New Paradigm or Wishful Thinking? via Multifamily Executive Magazine

Few asset classes can boast a convergence of favorable circumstances to rival that of the apartment sector. Whether by choice or necessity, record numbers of American families have swelled the rental ranks since the onset of the housing market collapse, fueling the robust property fundamentals that undergird the sector’s post-crisis investment thesis.

Absent stronger economic foundations for space demand, no other property sector has evinced a similar pattern; and so, nearly four years after the economy’s return to expansion, apartments continue to define the recovery in commercial real estate. But the sector’s outperformance cannot persist indefinitely. In 2013, firming housing market conditions will coincide with the cycle’s first measurable increases in apartment supply, moderating property income trends and reinforcing the need for risk management in new lending.

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