November 10, 2017
Commercial Property Update: Apartment Markets Led the Way in the Third Quarter
The apartment market led the way among commercial property markets in the third quarter, as robust demand pushed down the national vacancy rate and supported rent growth.

Commercial Property Update: Apartment Markets Led the Way in the Third Quarter

November 9, 2017 | Calvin Schnure | Nareit

AdobeStock_120649007

The apartment market led the way among commercial property markets in the third quarter, as robust demand pushed down the national vacancy rate and supported rent growth. Office, retail and industrial property markets each saw some easing of demand growth, leaving vacancy rates flat to up slightly. Rent growth has slowed from the rapid pace enjoyed in 2015 and 2016.

The news on the apartment market is particularly interesting, as many observers had noted how conditions softened last year amid a wave of new construction (chart above, completions shown in dark blue, with the sign reversed). Completions reached 68,000 units in the spring of 2016 and another 65,000 in the summer. Net absorption slowed last year as well, fueling concerns that the market was entering a downturn.

What a difference a year makes! The supply pipeline has eased off, with 56,000 apartment units completed in the third quarter, the slowest in a year and a half. Net absorption, however, posted a sharp rebound to greater than 70,000 units in both the second and third quarters, likely reflecting the “pent-up demand” represented by millions of households that are doubled up with family members or other roommates. As noted in prior Market Commentary, we estimate this pent-up demand will generate a need for as many as 3 million additional homes and apartment units to relieve the housing shortage that exists in most markets. It will take more than a few years of construction at current rates to meet this demand, and we expect apartment market conditions will remain tight for the foreseeable future.

Read Full Article Here

Recent

Most Popular

Blue Vault Q2 2023 Performance Reports Update

Blue Vault Q2 2023 Performance Reports Update

Blue Vault Q2 2023 Performance Reports Update 10-3-2023 Blue Vault wishes to acknowledge and apologize for the delay in publishing some Q2 2023 NTR Individual Performance Pages (IPPs) as well as the full review. We recently added additional reporting metrics to our IPPs, and that, combined with coverage of all share classes and some additional…
Blue Vault Q2 2023 Performance Reports Update

Blue Vault Q2 2023 Performance Reports Update

Blue Vault Q2 2023 Performance Reports Update 9-25-2023 Blue Vault has published the Q2 2023 Nontraded BDC Industry Review as well as Individual Performance Report and Limited Operations pages for the following offerings (newly published pages in bold font): Nontraded REITS American Healthcare REIT Q2 2023 Apollo Realty Income Solutions Q2 2023 (limited operations) Ares…

Explore

Blue Vault Logo
Don’t miss alts news
and educational events

Subscribe Now