The commercial real estate market, and specifically the multi-family sector is booming. According to the latest research from RENTCafe, the demand for apartment units remains strong, in turn causing rental prices to increase.
As rents continue to increase across the country, more and more investors are looking for new markets to expand into. This growth has led to historically high pricing and a surplus of buyers looking for multifamily product. Many of the groups have set their sights on secondary and tertiary markets in the Midwest to invest their capital.
Rents are not the only driving forces behind the multi-family market strength. Other factors that are contributing to this growth include:
- 12 consecutive years of rental demand growth, pushing total rental households to 43.3 million
- 1 Million new renters per year from 2012-2016
- Rental demand is at its highest level in past 50 years with 37% of U.S. households renting
- Vacancies remain near historic lows at 5.9% nationally
- Despite growth, the market has added less new housing over the past decade than in any 10-year period dating back to at least the 1970s
- The U.S. will need to add over 4.6 million new rental units by 2030 to meet projected demand, or 350,000 units per year; far above the last 4-year average deliveries of 244,000 units
At AREA, we believe that today’s multi-family market is not just about buying and selling, but rather understanding the driving forces at play in the market. We work to help our clients decide the best ways to make the most of their properties, and in turn, increase the value of them. To learn more about the multi-family services we provide, click here or contact Grant Kollman and Charlie LaBarr to discuss your multi-family real estate needs.