Demand stability and growing liquidity for small multifamily assets are broadly supportive of the sector heading into 2022. Here’s a look at Q4 2021 small multifamily investment benchmarks.
Single-family rental enjoyed its best year on record in 2021, as demographic and pandemic-related forces combined with growing investment enthusiasm. The sector’s decade-long trend of institutionalization has accelerated over the past year.
At the Mortgage Bankers Association’s (MBA) 2022 Commercial/Multifamily Finance Convention and Expo) in San Diego, CA, in mid-February, the following three topics were discussed by presenters and attendees and reflect what’s top-of-mind for the industry.
The SFR sector has historically attracted renters who seek a more spacious, suburban lifestyle but are not looking to buy for various reasons. While the concept of SFR is not new, it has gained more attention in the last decade as institutional involvement has increased following the Global Financial Crisis (GFC).
Inflation concerns, new virus variants, tighter monetary policy and high construction costs are among the top factors set to impact multifamily in the year ahead. Read on for the full lookahead from Arbor and Chandan Economics.
UNIONDALE, NY (February 22, 2022) – Arbor Realty Trust, Inc. (NYSE:ABR), a real estate investment trust and national direct lender specializing in loan origination and servicing for multifamily, single-family rental (SFR) portfolios, seniors housing, healthcare, and other diverse commercial real estate assets, is pleased to announce the appointment of David E. Friedman, Executive Vice President, Syndicated Markets & Institutional Venture Lending Management. Mr. Friedman will lead Arbor’s loan syndicated lending platform, as well as develop strategic joint-venture lending partnerships that will allow Arbor to expand upon its existing loan origination capabilities. Further, he will manage those platforms as a member of Arbor’s executive committee, helping to grow upon another record-setting year of loan production. “David comes to Arbor with over two decades of experience in real estate finance, multifamily loan production and managing capital markets,” said Ivan Kaufman, Chairman and CEO of Arbor Realty Trust. “His expertise in these areas will help support our corporate growth strategy and we look forward to the many contributions he is certain to make during his tenure at Arbor Realty Trust.” Previously, Mr. Friedman Read the full article…
Multifamily rent growth for the U.S. overall was up 12.5% during 2021, the largest annual gain since REIS began tracking data in 1980. As was the case throughout the year, Florida markets were found up and down the list of top rent growth markets.
Despite a slow start to 2021, the U.S. multifamily market posted a record-breaking year. Rent growth was the highest since REIS began tracking data in 1980, as vacancy rates continued their downward trend. Investment sales also shattered previous records, while cap rates remained near historic lows and below those of other major property types.
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Las Vegas led the nation in rent growth in 2018, at 8.6% year-over-year. This strong performance was largely driven by strong population growth and a high concentration of prime-age workers. The addition of new supply to the market resulted in a slight uptick in the vacancy rate, but it remained among the lowest nationally.
Rental demand for Baby Boomer-Senior renters is most concentrated in affordable, amenity-rich large apartment properties in smaller metros.
The U.S. multifamily market further solidified itself as the premier real estate asset class in 2018. Rent increases continued and vacancy rates remained low, despite high levels of development activity. Investment sales reached record-high volume levels, amid low cap rates and rising prices.
Panelists at Ariel Property Advisor’s recent Coffee & Cap Rates℠ event in New York City reflected on the city’s rental market performance in 2018, as well as the factors and trends set to impact the sector this year, including interest rate volatility, as well as market and regulatory uncertainty.
Smaller metros offer a balance of affordable apartment rentals and growing economic opportunity that is increasingly catching the eye of transient Millennials. Millennials comprise an increasing share of the adult rental population moving from larger to smaller urban centers across asset types.
The Las Vegas multifamily market led the nation with the highest rent growth during 2018, driven by strong migration trends and a high concentration of prime-age workers. A rise in new construction bolstered a slight increase in the vacancy rate, yet it remained among the lowest nationally.
The U.S. multifamily market further solidified itself as the premier real estate asset class in 2018. Rents increased for the third consecutive year, while vacancy rates remained low despite historically high levels of development activity. Low cap rates and rising prices didn’t restrain investment activity. Given the favorable demographics surrounding the sector, multifamily investors can expect these trends to continue in 2019.
As the generation behind Millennials, known as Gen Z, begins to reach adulthood, the apartment market seems ready for a reset. Property managers will need to adjust their strategies to maintain their assets’ appeal.
The renewed economic and cultural dynamism of smaller U.S. metros has pulled apartment rents up, while the housing crisis in the Golden State remains unrelenting. Of the 10 metros that showed the highest average rent increases for small apartment buildings, the majority comprised medium-sized urban centers.
Despite significant pressure from rising interest rates through most of 2018, the small balance multifamily market ended the year strong, with consistent liquidity and borrowing capacity. Whether the macroeconomic and real estate cycles continue to lengthen or begin to see a modest pullback, the multifamily sector is poised to outperform other property types.