Suburbia has gotten a bad rap of late. The popular narrative among apartment investors, lenders and developers is that urban trumps suburban. That is certainly true in terms of liquidity, fueled by investor appetite. But is it also true of fundamentals?
Not exactly.
A new study by MPF Research shows that the differences in performance are much slighter than widely perceived. In fact, apartment occupancy and rent growth over multiple cycles are remarkably similar between central business districts and “good” suburbs, while renter turnover is – surprisingly – a bit higher in CBDs. And given cap rate compression and price appreciation in urban spots, suburban deals may offer more upside at this stage of the cycle – at least for investors who aren’t 30-year holders.
Read more...In the Right Suburbs, Apartment Performance Mirrors the Urban Core | Property Management Insider
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