Small Multifamily

Here’s a quick look at the small balance multifamily finance and investment benchmarks for Q2 2018.

Millennial students looking for off-campus accommodations in university towns rent more frequently in small apartment buildings, and at higher rates of apartment sharing.

Strong economic growth, rising interest rates, and exceptionally tight labor markets contributed to small balance lending volume reaching an annualized rate of $47.0 billion through the first half of 2018, down 5.8% from last year.

Small apartment buildings comprise the largest share of workforce housing demand within the top 20 metros, while single-family rentals dominate the next 30.

Workforce rental housing demand has increased the most in the smaller metros where apartment properties, both small and large, are increasing their shares of this demand segment.

Data on the extent of housing-cost burden shows that relatively fewer households in small apartment properties are impacted severely by rental expenses.

The share of household income spent on housing costs for small properties ranges significantly across the largest U.S. cities. Overall, this share has declined slightly with the ongoing economic recovery, improving affordability in recent years.

In their unit mix, small apartment buildings are more specialized in bigger units compared to large properties, while also being more affordable. Renters can find value in small apartment properties, as examined in this update.

Small property unit demand from the boomer-senior age group is dominated by renters living alone, calling closer attention to property-level upgrades.

Here’s a quick look at the small balance multifamily finance and investment benchmarks for Q1 2018.