Magazine article Mortgage Banking

Multifamily Performance Spurs 47 Percent Rise in Permitting

Magazine article Mortgage Banking

Multifamily Performance Spurs 47 Percent Rise in Permitting

Article excerpt

The apartment market's "tremendous" performance for more than two years is spurring new multifamily construction across the country, reported Axiometrics Inc., Dallas.

"The sequential growth rates for effective rent and occupancy were very strong," said jay Denton, vice president of research with Axiometrics. "The increase in effective rents between February and March, both on an absolute and relative basis, was stronger than any month [in the last four years]. Monthly absorption was also the strongest in almost two years. Class-C properties had the best absorption rates, while class-A properties are still pushing rents the most year-over-year."

Effective apartment rents increased more than 15 percent since December 2009 in 167 submarkets. Of those top-performing submarkets, 51 saw 20-plus-percent effective rent growth. Unsurprisingly, "those high-growth submarkets are the places where we see the most new apartment construction," Denton said.

One common theme of these top-performing submarkets: Many are urban core submarkets with a high concentration of class-A assets. "Of course, not all markets and submarkets fit that mold," said Demon. "There are some lower-tier submarkets where we've already seen shovels in the ground. …

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