Widely considered bulletproof not long ago, multifamily rent growth now faces a couple of potential stumbling blocks. Namely, home ownership is back on an upward trend and new construction is putting pressure on existing properties, says Moody’s Investors Service in a new report.
Among the major commercial sectors, “multifamily is the only one to which many tenants have a viable alternative: in this case, renting or owning a single-family home,” writes Tad Phillip, SVP and director of CMBS research at Moody’s. Single-family is still “in the early stages of recovery,” with construction starts that are about one-third of the levels they reached before the recession.
“Conversely, the multifamily segment has matured to the point where rents and construction starts have returned to their approximate pre-crisis levels,” he writes. Apartment development has accelerated to the point of threatening to undermine existing properties’ revenue streams.
Read more...Home Ownership, New Stock Squeeze MF Rental Growth - Daily News Article - GlobeSt.com
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