Are you investing in the Southeast area of the Country? Several Southeast markets continue to top national lists for job and population growth, causing investors to pour capital into the region’s multifamily sector as they chase a new wave of demand that’s driving the current market expansion.
According to this article, ARA and Berkeley Point Capital’s 2Q 2018 United States Multihousing Market Report includes several Southeast hubs among its top 25 for sales volume in the past 12 months: Atlanta ($7.3 billion); Orlando, Fla., ($5.6 billion); South Florida ($4.5 billion); and Charlotte/Raleigh–Durham, N.C., ($4.2 billion).
(Atlanta, $7billion in multifamily sales in the past 12 months)
Investors in Action
Developers had studied the demographics of renters and came up
with the conclusion that luxury product in both urban core and suburban locations
attracts millennial renters, thus, developers are responding accordingly by raising the level of quality and on-site amenities in the suburban product to match those of the urban infill movement.
This report from Real Insight (ARA), Also places Charlotte among the top rental markets in the nation, with 7,841 units absorbed in the past 12 months—all while inventory rose and occupancy rates held firm at 95%.
Meanwhile, in Georgia, particularly Atlanta, national developers including Alliance, AMLI, Trammell Crow, Greystar, Hanover, Worthing, and Wood Partners are extremely active, along with regional firms. An influx of new buyers from the West Coast, Midwest, and New York is creating a competitive environment and driving cap rates down.
In Florida, select urban submarkets are experiencing a high concentration of deliveries. Since construction costs are up significantly for Type 1 construction, many investors and developers are cautiously pursuing these opportunities. Florida’s household growth is projected to grow from $8 million in 2017 to $8.6 million by 2022.
In the Carolinas, delivery happens at a much more measured pace than the total unit count suggests. Fewer units have come on line in recent months than originally projected, allowing management more time to work through lease-up toward stabilization without the pressure to make hefty concessions.
Ground-up development will remain attractive, albeit with equity selective on submarkets and micromarket locations. In Atlanta, the rise of two $2 billion stadiums last year continues to draw both national and international attention to the metro area.
This week I will send you links to get multifamily market report (any state), quarter 3 market update and sales for 2018.
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In the Moment, For the Moment
Christian Yepez, Investor/Syndicator
Socal Holding Group, LLC
Los Angeles, CA