CREPN #98 Multifamily Market Opportunities with Ryan Kimura

CREPN #98 Multifamily Market Opportunities with Ryan Kimura

J. Darrin Gross Podcast

Where are the Multifamily Market Opportunities?  


Find a market with jobs, low rental housing supply and rents that are affordable.

The Multifamily market has been cooking for several years as the demand for rental housing created by the crash and millennials who choose to live in cities.   

As the cycle continues, investors begin to ask, “how long can this last?”

If you are a developer or investor, the ability to look at a specific market and identify the characteristics in play are critical to your success.  Firms like firms like Axiometrics, acquired by RealPage, specialize in providing monthly multifamily market data.

Primary markets with the most demand and development, are showing signs of oversupply in the class A units.  In these markets, free rent concessions have begun to show up and rent growth has slowed.

Say goodbye to rent growth of 12, 14 and 16% year over year is no more in most markets.  The healthy markets for the near future suggest 2 – 3 % annual rent increases.  


Are there still multifamily market opportunities?

While primary markets ability to absorb all of the new units has begun to cool, the secondary and tertiary markets still show signs of opportunity for investors and developers.

What’s the key?  The fundamentals of opportunity remain the same.  Where are the jobs?  Where is supply tight, and rent is still affordable.

Tech jobs pay well and drive up the demand for high end housing.  


Things to watch?

The cost of construction is rising based on the tight labor market.  This has not slowed development, but it is driving the cost of developing new units and repositioning older units.   

Millennials continue to want to live downtown, are not getting married and do not want to move to the suburbs.  Until then, multifamily demand should remain strong.


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