4 Multifamily Development Trends to Watch in 2019

Changing demographics, shifting social values, and evolving development landscapes all continue to drive a surging, nationwide demand for multifamily housing. With empty-nesters looking to downsize, millennials staying single longer, and a general desire for a more convenient and social lifestyle, more and more “renter-by-choice” Americans are forgoing mortgages for lease agreements.

As demand for new housing units continues to drive the multifamily sector in 2019, developers are tasked with finding new ways to satisfy the growing need for apartments.

Full article HERE

Source: Multifamily Executive

Prices Keep Rising for Apartment Properties, Forcing Investors into Smaller Markets

Investors keep looking for apartment buildings to buy at good prices. The search is leading them to smaller properties in smaller markets.

“Things continue to be very good in multifamily,” says John Sebree, national director of the national multi housing group with brokerage firm Marcus & Millichap.

The amount of money multifamily investors are spending has stabilized at a high level. Investors continue to accept relatively low yields on their acquisitions, even though interest rates rose substantially in 2017 and are expected to rise further. Part of the reason is that apartment rents continue to rise across the country, attracting investors to bid for new properties.

Full article HERE

Source: National Real Estate Investor

Promising Cities for Commercial Real Estate

Commercial real estate in the U.S. is at a turning point, with primary markets like New York, Los Angeles, and San Francisco showing signs of overheating—that’s according to online marketplace for real-estate investments RealtyMogul.com. As is common in this phase of a real-estate cycle, secondary and tertiary markets across the country are where the new action is, the firm claims. So Barron’s Penta asked its real-estate team to identify the top commercial real-estate markets that high-net-worth investors should be looking at. Here they are, in order of preference.

Number 3 and 4 on the list: Nashville and Raleigh!

Nashville. The cost of doing business in Music City, U.S.A. is 20% less than in the rest of the country, claims Helman, and that’s attracting new firms to the area. More than 200 companies have relocated to or expanded in the hip city’s metro area, accounting for 25,000 new jobs and 15 million new square feet of commercial real estate coming online in the 24 months leading up to May. Nashville also has one of the nation’s best recession hedges, as the capital of the U.S. health-care management industry, Helman says. “Whether the economy is good or bad, people still need health care,” she says. There is plenty of opportunity building multifamily housing units, as the city’s population growth outpaces the current supply of properties.

Raleigh. Highly paid young folks are moving into the city in large numbers, with the 20-year-old to 34-year-old crowd accounting for more than 23% of the city’s total population. The University of North Carolina at Chapel Hill and Duke University provide a continuous flow of budding, educated workers to Raleigh’s relatively high paying tech and pharmaceutical jobs, says Helman. They aren’t “going to have the capital to buy [a home], but will rent one,” she says. Investors should target rental apartment buildings and multifamily housing units. Homeownership is relatively affordable with the ratio of median home price to median household income higher than the national average, which is also an argument for purchasing multifamily housing units targeted at an older age group.

Full article HERE

Source: Barrron's

Why Innovation Districts Matter

Metropolitan areas in the United States and other mature economies face out-sized challenges in the aftermath of the Great Recession. At the most basic level, U.S. cities and metropolitan areas need more and better jobs. According to the March 2014 Brookings Metro Monitor, the number of jobs in 61 of the 100 largest U.S. metro areas are still lower than their pre-recession peak; incredibly, job levels in 23 metros are more than 5 percent below their pre-recession peak. At the same time, the number of people living in poverty and near poverty has grown precipitously in the largest 100 U.S. metros—from 48 million in 2000 to 66 million in 2012— due not only to the recession but broader trends around wage stagnation and economic restructuring.10 Beyond these economic and social demands, cities are on the front lines of addressing enormous scale and environmental challenges given federal gridlock and the absence of leadership in many states.

In the face of these challenges, cities and metropolitan areas are experimenting with new approaches to economic development and sustainable development that focus on growing jobs in productive, innovative, and traded sectors of the economy while concurrently equipping residents with the skills—particularly STEM (science, technology, engineering and math) skills —they need to compete for and succeed in these jobs.11 These new approaches try to build on the distinctive assets and advantages of disparate places rather than merely pursuing heavily subsidized consumption-oriented strategies (e.g., building the next sports stadium, convention center, or performing arts facility) that yield low quality jobs or aspiring to unrealistic economic goals (“becoming the next Silicon Valley”).

Innovation districts are a key part of the new wave of local economic development and advance several critical objectives...

Full Research Report HERE

Source: Brookings Institute