Apartment Investment Remains Strong

Posted August 7, 2012

In Apartments, California, Columbus, Commercial, Los Angeles, Ohio

The multifamily segment of commercial real estate continues to strengthen in spite of new supply coming on line according to Randyl Drummer of CoStart news. Demand still far outstrips demand.

For the sixth consecutive quarter, the National Multi Housing Council Quarterly Survey of Apartment markets showed improvements across all four indices. The indices measure supply, demand, and financing.

“The apartment sector’s strength continues unabated,” said NMHC Chief Economist Mark Obrinsky. “Even as new construction ramps up, higher demand for apartment residences still outstrips new supply with no letup in sight.

In spite of all the good news, acquisition and construction financing remains constrained in all but the best markets with the best properties.

The indexes measures market tightness. The results were: (76), sales volume (54), equity financing (58) and debt financing (77). Results over 50 indicate growth from the previous quarter.

Despite the capital markets barriers, just over half the CRE executives queried in the 2012 KPMG Commercial Real Estate Outlook Survey said they expect a significant amount of multifamily development to begin in 2013 — by far the top sector, and up from 34 % in KPMG’s 2011 survey. Industrial development was a distant second among property sectors at 14%.

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