Midweek Moo's
Courtesy: NREI
Multifamily Investor Strategies (via National Real Estate Investor)
Jul 28, 2015 By Michael Bull, CEO, Bull Realty Inc.
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“We’re not that concerned with overbuilding, because demand is so hot,” explained McCleskey.
But she advised keeping an eye on those upscale urban markets. There’s a lot of product in close proximity at a similar price point. Since the downturn, new deliveries have focused on the urban core. In some markets, excess supply is affecting rent growth, and that’s where you could start to see some cool-down.
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National Real Estate Investor tends to have an eastern bias but Denver gets a mention.
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Joseph Wilber, senior vice president of Gables Residential, runs a full-scale development firm, with over 14,000 units in eight major markets. They have 2,500 new units in some stage of construction, lease-up, or planning.
“We’re delivering 1,500 new apartment units this year in Coral Gables, Florida, Atlanta, Boston and Denver, both apartment buildings and mixed-use developments.”
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NREI of course looks at things from the investor side.
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While urban land is expensive, mid- to high-rise buildings also require expensive materials. Today’s urban projects are built to a high level of finish, with club facilities, media rooms, and concierge services, not to mention ultra-high-speed Internet. All this means rents need to be north of $2.40 – 2.50 per sq. ft. in order pencil out.
“Data has been showing us for years that Millennials want to live in the city. The real question is how deep is that market?” Wilber asked.
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While the thinking is that in many cities the surge in urban apartment construction will likely decelerate this forecast has already been delayed a couple of times. It appears as though Denver still has another nine months of healthy groundbreakings at a minimum.
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