Author Archives: Randolph Taylor

In 2023, the U.S. multifamily market has seen a significant upswing in renter demand, especially for mid-priced apartments rated three stars. This shift marks a recovery from a sluggish performance in the latter half of 2022.

For renters who’ve felt the sting of rapidly increasing costs, there’s a sigh of relief on the horizon. The rapid inflation of rent prices, which has been a pressing concern for many in recent years, is showing signs of stabilization.

Investors are flocking to student housing as its rent growth outpaces traditional multifamily properties, lured by its resilience during economic downturns and higher-than-average returns.

More than half of the country’s 100 largest cities report decreasing rents. Significant drops are seen in “zoom towns” like Arizona, Nevada, Idaho, with Oakland, California, noting an 8.7% decline. Meanwhile, Midwest and New England cities, such as Chicago and Boston, show modest recent rent growth compared to prior years.

For years, renting in the suburbs meant shelling out less than city rents. However, recent data indicates that this traditional disparity is lessening, leading many to wonder why.

The CRE industry is navigating challenging waters with higher interest rates, limited financing options, and a slowing economy. Yet, promising developments (“green shoots”) suggest potential growth opportunities.

A rising number of the super-rich are placing their bets on the US rental market as falling prices in the apartment sector make it increasingly attractive.

Capital scarcity in multifamily is leading developers and operators to explore alternative funding, with preferred equity gaining popularity due to its higher-than-average returns.

This year sees a marked decline in new apartment construction, attributed to elevated interest rates, reduced rents, and overbuilding worries in select regions.

The multifamily sector faces a complex supply challenge, with abundant ongoing development and varied implications across different locations and property types.

National supply-demand imbalances in multifamily housing affect pricing, leading to varied rent changes in different metro areas over the year.

As 2024 nears, the rental housing market grapples with challenges and opportunities in a fluctuating economic landscape, shaped by inflation and rising costs. Here are 5 key trends expected to influence the sector in the coming year.

Although some investors prefer finding new construction, there are many benefits to investing in older buildings.

Multifamily real estate can benefit first-time and experienced commercial real estate investors. Scaling up a real estate portfolio is much simpler with multifamily buildings thanks to their multiple units or “doors.”

Navigating the multifamily property sales landscape can be a complex endeavor, requiring careful planning, strategic execution, and expert guidance. To ensure a seamless and profitable sale, thorough preparation is essential. This comprehensive guide outlines the key steps involved in preparing your multifamily property for sale, empowering you to achieve its full market value.

Commercial property rates are expected to stabilize – aside from office space – and commercial real estate will revitalize, according to NAR Chief Economist Lawrence Yun.

Always the industry’s golden child, multifamily transactions are expected to pick up in mid-2024,

The passage of the Tax Cuts and Jobs Act (TCJA) in 2017 significantly changed the rules for bonus depreciation by allowing businesses to immediately write off 100% of the cost of eligible property acquired and placed in service after September 27, 2017

Medical offices were not as affected by the pandemic as other facets of the health care system.” As a result, vacancy rates have remained steady

Although rent growth has cooled significantly over the past year, the national median rent is still 23 percent higher than it was just three years ago, and in some markets, the increase has been even more substantial.

In the five-year span from 2015 through 2019, the big lenders for multifamily were government-sponsored enterprises. In the first half of 2023, the same dynamic is again present

Fannie Mae has launched a new financing program to support the creation and preservation of workforce housing for middle-income renters.

While few economists expect a housing crash in the near future, many do think the market will cool off because current mortgage rates are making buying a home even less affordable.

For the first time in more than 20 years, Chicago’s apartment rent growth is the highest among its major market peers over the course of three consecutive quarters.

With less that 5% of the rentals here available and little to no apartments built recently, 67.3% of apartment dwellers in the area decided to just stay put.

There may be slight variations on exactly how each ownership type works in different estates, but below is a general overview of the different ways to hold property

As economic pressures grow, owners and investors increasingly look to professional property management for end-to-end solutions.

eXp Commercial is pleased to present to market Indian Creek Apartments, a fully occupied 24-unit multifamily complex on the northeast side of Aurora, Illinois, bordering affluent Naperville, Illinois, just to the east. The property is in good condition, with considerable upside in rents with modest unit updates. All units have separately metered tenant-paid water, sewer, electricity, heat, and hot water. Also offered is an attractive low-interest assumable debt of $1.453 million at a 3.32 percent interest rate not due until December 2028.

In Chicago, there is a great inventory of multifamily properties. But we still have not been able to keep up with rental demand. The higher interest rates have kept some people from buying single-family homes.

Rent growth seems likely to regain momentum as early as spring 2024, when the normal seasonal upturn in leasing velocity should coincide with obvious signs that today’s new supply excess is temporary. Price increases should then prove robust during 2025.

There is less buyer/seller disconnect in the marketplace as the frequency of interest rate hikes and the size of those hikes have decreased

Operational costs for apartment companies grew by 8.6 percent on average year-over-year in the second quarter of 2023

Dollar volume of sale leaseback deals rose 8.3% to $5.1 billion in the second quarter over the first, while the transaction count remained in line with 165 versus 173 in comparing the same two quarters

Chicago had the 13th-highest number of new apartments completed in the last few years, adding 25,323 new apartments between 2020 and 2022.

Multifamily investors are learning how to navigate a new reality. The market is returning to standard seasonal patterns, thanks largely to the strong labor market and increased household formations, which is supporting positive rent growth and stabilizing occupancy rates.

The pipeline for multifamily development has slowed due to continued challenges of higher interest rates and difficulty securing funding, and that includes filings of permits

Modifications on commercial real estate-related collateralized loan obligations spiked in the second quarter to $4B as more property owners sought refuge from encroaching maturity dates and rising interest rates. That figure is a 300% increase from the first quarter

Insurance now accounts for more than 8% of an owner’s quarterly per-unit operating expenses, nearly double the share from five years ago.

While the nation still faces a housing shortage not set to alleviate in the near term, a thinning construction pipeline could help stabilize the multifamily sector.

The battle between renting and owning is intuitive. If renting is significantly cheaper than owning a home, more of the population will gravitate towards renting. If homeownership is only moderately more costly than renting, people will be more inclined to pursue ownership.