News & Opinions
The latest news and insights from Hanley Wood’s outspoken experts and key thought-leaders throughout the residential and commercial design and construction industry.
Renter Demand Holding Fast So Far As Apartment Supply Wave Begins to Break
Randyl Drummer / August 21, 2013
Vacancies, Rental Rates Have Reached A Tipping Point In Most Markets, Complicating Investors’ Search for Great Deals
The tightening competition among apartment investors will yield both winners and losers during this next supply-driven phase in the multifamily market. The winning developers will likely be those that offer products that are new and different, capturing renters who have an expanding menu of housing options and amenities.
“We’re past the point at which simply picking a market that will lead to a successful strategy,” said Luis Mejia, CoStar Group director of U.S. research, multifamily at CoStar’s Midyear 2013 Multifamily Review and Outlook. Mejia was joined in the webinar presentation by real estate economist Francis Yuen and quantitative analyst Mark Hickey. “Due to the impending supply wave and increased investor interest in apartments, investors need to go beyond that and be able to identify opportunities within each market — regardless of whether it’s a mature, early recovery or late-recovery market — that put them in a position to compete.”
To avoid being swamped by the new offerings hitting the market, it’s important for developers to position their projects as new, different and better from an operational, technological or locational perspective — especially for higher-end projects competing for well-heeled renters in such markets as Silicon Valley and the Boston seaport area, Mejia said.