The multifamily sector, especially rental apartment buildings, continues to be a hot sector for commercial real estate investors as it demonstrates sustained underlying strength.
Even as construction of new apartment buildings hit the highest monthly construction pace since the beginning of 2006, the latest absorption rates for unsubsidized, unfurnished, newly built apartments have kept pace. The Census Bureau reported that the latest 3-month and 6-month absorption rates for apartments had risen to 64% and 83%, respectively.
Driving this strong demand is an increase in the number of tenant households, which have pushed apartment vacancy rates down to the lowest level since 2000, and on average, inflation-adjusted rents in the U.S. have returned to their prior peak levels of 14 years ago, according to Freddie Mac’s latest U.S. Economic and Housing Market Outlook issued this past week.
Read more...Milllenials Maintain Multifamily Momentum, Spur Sustained Investment - CoStar Group
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