As 2017 ends, it’s time to predict upcoming trends in the multifamily rental market. If you’re a multifamily investor, there will be a few surprises and some changes you should be prepared for. Here are five areas to follow.
BUILDING RENOVATIONS STAY THE COURSE
There’s a considerable amount of new construction in cities where there is demonstrated and structural job growth, including Portland, Seattle, Los Angeles and Denver. Traditionally, developers have been able to pencil in growth and get a good return for the risk of that development. New multifamily units being constructed in urban areas, urban cores or high-growth and high-job areas have caused a softening in the Class A market for the first time in years. In the new-built market, we’re finally seeing a plateau where supply is meeting demand. Do we need more Class B properties built in suburban locations to meet demand? Absolutely. Are they going to get built? Probably not. The risk/return for developers just doesn’t pencil. The upside to a softening market? Older existing Class B multifamily units built in the ‘70s, ‘80s and even ‘90s, which have been renovated will be in higher demand.
Read more...5 Trends in Multifamily Investing for 2018
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