After several years of little new apartment construction, development activity has ramped up. But industry experts aren’t worried about overbuilding. The number of units under construction is still below historic norms. Plus, most properties coming online today are leasing quickly—with some rental rates well above expectations.
“We’re coming off two exceptionally low years of new deliveries, and we’re still well below the long-term average,” says Michael Ging, Alliance Residential Company’s (ARC) Florida managing director of development. “I don’t see where we’re going to have an oversupply condition.” ARC’s newest property, Broadstone Citrus Village in Tampa, Fla., is 75 percent leased and achieving rents 10 percent above pro forma.
Annual multifamily permits increased by 48.5 percent during April compared to a year ago, representing six consecutive months of annual permitting above 200,000, according to the U.S. Census Bureau. Research firm Axiometrics says new apartment construction will only add 0.7 percent to overall inventory in 2012 and 0.9 percent in 2013.
Read more...Observers Say Concerns Over Multifamily Overbuilding are Overblown via NREIonline.com