News
Multifamily Explained
May 12, 2010
| A new CoStar report says that while an increase in echo boomers reaching prime renting age will help fill apartment vacancies, lack of job growth may keep some living with their parents until 2011-2013. (Here's what CoStar won't say: It's time to take the Mariah Carey posters and bunk beds out of storage.) | |
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| CoStar's Norm Miller, Jay Spivey and Michael Cohen opined in a recent webinar that, nationally, absorption may take time since 118k units came on the market in 2009 and another 44k will come on in 2010. With about 1/3 of renters occupying a single family home or condo, the return of the for-sale housing market will also reduce vacancy. Above, we snapped the Martino Group's Hickory Street Lofts in Denton, under construction in the 300 block of Hickory St. Denton Economic Development director Linda Ratliff says renters shouldn't be hard to find as the college and art crowds are still craving the downtown live, work, and play experience. | |
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| CoStar's analysis wasn't as murky as the Dallas skyline last Friday. Areas with the most new job growth, like Atlanta, Dallas and Houston, will be the first to see absorption, while New York and Chicago may lag due to lack of job creation. Sales of apartment buildings will be driven by REITs, which have about $40B to invest in apartments in the coming years. Distressed sales currently make up about 30% of apartment transactions, Jay says. Cap rates should be around 8.5%, as apartment vacancy has reached its peak. | |
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| Lenders for the Oakwood Village Apartments (pictured) foreclosed March 7 on the 288-unit on Highway 80 in Mesquite. The Cantrell Company's Todd Franks and Sam Pettigrew are listing the property for $5M for an all cash transaction. The complex is an excellent reposition opportunity for an investor, Todd tells us, with a renovation and stabilization of the asset to the market occupancy of 90%, a buyer should be able to realize a substantial return on their investment. “There are so many opportunity funds looking for deals like this. It would be a good fit for local owners, especially,†he says. |
