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| Michael Bull |
ATLANTA, GA – After several years of almost head-spinning
improvement, the U.S. apartment market still faces a bright future, but the
sector has entered a phase of more modest rent growth and stabilized occupancy
levels.
That was one of the market
insights provided on the most recent episode of the “Commercial Real Estate
Show” radio program, hosted by Michael Bull of Bull Realty. The episode
provided an enlightening look at the U.S. multifamily sector, as Bull and his
guests discussed a number of topics, including rent increases, occupancy rates,
investor interest and operational challenges.
The national
apartment occupancy rate was 94.9 percent at the end of the first quarter, said
Greg Willett, vice president of research and analysis for MPF Research,
a division of RealPage. “Looking at occupancy numbers, we have been essentially
full across the country for right at two years,” he said.
 |
| Gregg Willett |
Nationally, the
average rent has increased almost 11 percent since the end of 2009 and is now 5
percent higher than its pre-recession peak, according to Willett. Annual rent
growth came in at 2.6 percent during the first quarter, down a bit from the 4.8
percent annual rent growth the sector experienced during its post-recession
peak, Willett said.
Looking forward, “we
think we have a couple of years where the occupancy rate pretty much stabilizes
where it is, maybe drifting down just a tiny bit,” Willett said. “We’ve also
reached the stage in the cycle where we would expect to see rent growth holding
around the long-term norm, which is 2.5 to 3 percent.”
 |
| Ernie Eden |
The single-family
home market has started to improve, but any negative impact that may have on
the multifamily sector should be blunted by the entry of more and more
Millennials into the workforce and the strict down-payment requirements on
single-family home purchases, said Marvin Banks, a corporate advisor to
Cortland Partners, a firm that owns and develops apartments, and a director of
the Private Bank of Buckhead.
Referring to Millennials, Banks said, “There’s so much
demand coming [into the multifamily sector], and [demand is] not going to be
much of an issue for a number of years … The demographics are undeniable.”
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| Marvin Banks |
Ernie Eden, a senior vice president in Bull Realty’s
Apartment Group, and Bull both noted that investor competition for apartment
assets remains fierce and therefore bidders must present organized and detailed
offers to sellers. “Get your money organized ahead of time and be able to show
the seller where the money is, who you are and why the seller should do
business with you,” Eden said.
“You’ve got to show
up with a great offer, and you better be able to show proof of funds,” Bull
added.
The entire episode
on the U.S. multifamily market is available for download at www.CREshow.com. The next “Commercial Real Estate
Show” will be available May 16 and will examine smartphone applications for the
commercial real estate industry.
For a complete copy
of the company’s news release, please contact:
Stephen Ursery
The Wilbert Group
404.965.5026
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