The Q3 2021 Single-Family Rental Investment Trends Report reveals the market had another strong quarter, fueled by robust rent growth and investor interest. Read the full report for an in-depth look at the SFR sector, featuring exclusive research and analysis.
Cap Rates Reach New Lows as Rents Continue to Soar The single-family rental (SFR) market had a strong third quarter, with record-setting growth continuing to attract new investors to the sector. This report provides an in-depth look at the SFR market with exclusive data and analysis on its performance. Key Findings: Cap rates dipped to 5.5% in the third quarter of 2021, hitting a new all-time low Vacant-to-occupied rent growth accelerated to a new high of 17.1% in July Occupancy rates were slightly below their generational high, reaching 95.0% in the third quarter Complete the form to instantly access the full report!
The eCore21 Summit brought together multifamily industry owners, operators, lenders and other executives to share their insights on the top trends impacting the multifamily market and what they expect in the year ahead. Here’s a quick recap of the eCore event.
Multifamily rent growth for the U.S. overall was up 7.9% year-over-year during the third quarter of 2021, as Sun Belt markets continued to drive the recovery.
The pandemic accelerated the adoption of hybrid and work-from-home (WFH) setups across industries and geographies. While WFH adoption initially posed as a headwind for large multifamily properties in gateway markets, new tenants and urban dwellers are returning to the cities, bringing signs of optimism for rental demand.
Las Vegas remained one of the nation’s top multifamily performers in the third quarter of 2021, with among the highest rent growth among large markets. After a brief pause at the onset of the pandemic, investors once again flooded into the market as sales volume neared a pace to reach 2019’s record high. The market also rose to the top of our Arbor-Chandan Large Multifamily Opportunity Matrix in 2021.
The Q3 2021 Small Multifamily Investment Trends Report finds that the asset class may be less impacted by work from home trends than larger properties as fewer small multifamily tenants can work remotely. See how the small multifamily sector performed by reading the full report.
Reliability of Small Multifamily Tenant Base Fuels Recovery Our quarterly report on the current and emerging small multifamily investment trends features data and research from Chandan Economics. The report reviews the state of the market, identifying trends in underwriting, financing, cap rates, valuation and more. In the report, you’ll learn how small multifamily properties differ from larger properties, and the forces driving their investment performance. Key Findings: An analysis of work from home trends finds that small multifamily properties may be less affected than larger properties because fewer tenants can work remotely. Small multifamily cap rates held at 5.2% in the third quarter, effectively unchanged from last quarter. The refinancing share of originations rose as investors locked in rates ahead of potential monetary tightening and expected rate rise. Asset prices rose 2.9% from a year earlier and 7.7% over pre-pandemic highs. Complete the form to instantly access the full report!
Los Angeles remained one of the more sought-after multifamily markets in the U.S. during 2017, as rent growth and investment volume ranked near the top nationally. The vacancy rate also remained low, despite an influx of new supply, and demand for additional housing remains high. The local economy has recovered from the recession, although high housing costs and restricted in-migration may slow expansion.
The Dallas multifamily market posted strong results in 2017 as rent growth continued and investment activity was high. Vacancy — driven by an influx of new supply — increased, though levels remained well below previous highs.
With a lower share of inventory located in flood-prone areas, small buildings are more conservative in their risk profile and offer value for investment across the apartment market. Resiliency and Risk Landscape for Small Buildings Recent reports point to a counter-intuitive trend of how home prices and apartment rents are growing faster in flood prone areas. This trend is explained by the premium associated with scenic locations such as beach fronts and waterways, since they are also the most-prone to flooding. This varies across metro areas and asset class. As shown below, based on data obtained from the American Housing Survey (AHS) 2015, around 8% of all small apartment building units in the United States were located within areas assessed with a high risk of flooding. In large buildings the share was slightly larger at 10%. The risk assessment for apartment buildings and their units varies greatly across metro areas. The data indicates that small buildings displayed a tighter spread around the national average compared to large buildings. An indication of the preference for scenic, albeit riskier, locations characterize the Read the full article…
Aided by growth in agency lending and refinancing activity, the volume of new multifamily loans with balances between $1 million and $5 million reached $49.8 billion during 2017
For their relatively lower rent levels, small apartment properties are surprisingly well-rated by their occupants, both in terms of unit quality and the neighborhoods in which they are located.
The U.S. multifamily market continued to post strong results during 2017. Rent growth slowed, although remained healthy, and appears to have peaked in 2015.
While a majority of apartment renters continue to live in small properties, renter growth in this property class is facing headwinds from large asset oversupply and rental incentives.
While apartment renting remains a predominantly urban affair across both the downtown and suburban areas of large US metros, renting activity is expanding into smaller cities and new property types.
When comparing rental demand by age segments, Baby Boomers stand out as the fastest growing group across the rental market.
The growing popularity of single-family rentals as a housing option for Millennials is skewing the multifamily inventory toward amenity-rich larger buildings. At the same time, the trend is helping consolidate smaller apartment assets.