Ivan Kaufman’s Blog2017-07-19T16:32:21+00:00

Ivan Kaufman’s Real Estate Blog

Weekly Roundup Intro: Week of August 5, 2019

This week’s roundup takes a look at single-family rental investment trends, apartment cap rates and the top markets for multifamily deliveries. First, Arbor’s Chatter blog releases its Q2 2019 Single-Family Rental Investment Trends Report, which offers insights on the sector’s fundamentals and performance in the first half of the year. Next, RealPage reports that apartment occupancy remains tight across the nation, with most of the largest metros seeing occupancy rates above 95%. NREI notes that apartment cap rates remain at historical lows, but a handful of top markets have seen them inch higher. Then, Freddie Mac offers its midyear outlook for the multifamily sector, observing that strong fundamentals and lower interest rates are fueling originations volume in 2019. Finally, Multi-Housing News lists the top five markets by multifamily completions, including the major developments that came online this year. 

Q2 2019 Single-Family Rental Investment Trends Report

Arbor Chatter – August 8

“Demand growth has outpaced the ability of the sector to convert existing residential supply. To address this, home builders and SFR operators are doubling down their bets on the sector and turning to build-to-rent strategies.”

Most Apartment Markets Are Essentially Full

RealPage – August 7

“With a nationwide occupancy of 95.9%, tight occupancy is seen across the vast majority of local markets. In fact, 129 of the nation’s largest 150 markets are seeing occupancy at or above 95%, the threshold for a market to be considered essentially full.”

Apartment Cap Rates Creep Higher in the Country’s Top Markets

NREI – August 6

“Cap rates on apartment buildings in the nation’s top markets have been creeping higher, but lower interest rates might yet change the trend.”

Multifamily 2019 Midyear Outlook

Freddie Mac – August 8

“The first two quarters of 2019 saw mixed results, with slower growth in the first quarter but preliminary second quarter information indicating the spring leasing season is off to a strong start.”

Top 5 Markets for Multifamily Deliveries

Multi-Housing News – August 2

“When looking at the numbers by the percentage of existing stock that new deliveries account for, the ranking changes significantly, highlighting that development activity is higher in secondary and tertiary markets.”

Weekly Roundup Intro: Week of July 29, 2019

This week’s multifamily roundup offers insights on apartment occupancy, rent growth and construction starts. First, RealPage notes that several metros experienced record-high occupancy rates in the second quarter, fueled by continued robust demand. Next, MBA observes that multifamily rents grew for the ninth consecutive month, resulting in 3% year-over-year growth. Arbor’s Chatter blog releases its second-quarter 2019 Small Balance Multifamily Investment Trends Report, which discusses the performance of the sector and the outlook for the rest of the year. Then, NREI examines why garden-style communities remain popular among developers in many markets. Finally, MultifamilyBiz reports that construction starts in the first half of the year were particularly strong, especially in major markets like New York City and Washington, DC.

Some Apartment Markets Hit Peak Occupancy in 2nd Quarter

RealPage – August 1

“Cincinnati’s apartment market reached an all-time high in 2nd quarter 2019. While not usually a national leader, Cincinnati ranked eighth out of the largest 50 apartment markets for occupancy in 2nd quarter.”

Apartment Rent Growth Accelerates Despite Slow Deliveries

MBA – August 2

“Nationally, rent growth has not been this strong since 2016 when pressure in the rental market spurred record numbers of multifamily permits.”

Q2 2019 Small Balance Multifamily Investment Trends Report

Arbor Chatter – August 2 

“Small balance multifamily lending volume in the first half of 2019 totaled $58.5 billion on an annualized basis, representing a 7.9% gain from 2018’s total.”

Garden-Style Apartment Projects Allow Developers to Expand in the Suburbs

NREI – July 30

“With many prime suburbs restricting high-rise construction, garden-style apartment complexes remain popular.”

Multifamily Housing Construction Starts Register Strongest Gains for the Year

MultifamilyBiz – July 29

“Through the first half of 2019, the top five metropolitan areas ranked by the dollar amount of multifamily starts were – New York NY, Washington DC, Los Angeles CA, Miami FL, and Chicago IL.”

Weekly Roundup Intro: Week of July 22, 2019

This week’s multifamily roundup takes a look at the homeownership rate, metro-specific fundamentals and the industry’s preparation for the LIBOR transition. First, MBA reports that the national homeownership rate declined slightly in the second quarter, as many of the newly formed households this year have chosen to rent. Next, RealPage examines Houston’s apartment market, noting that demand recovered in the second quarter, following several quarters of lagging absorption. Arbor’s Chatter blog offers Part 2 of its new video series, covering the small multifamily market’s performance during this economic expansion. Then, Axios analyzes the affordable housing shortage in Minneapolis, which is largely attributed to the majority of new construction being higher-end product that is out of reach for lower-income residents. Finally, Arbor’s Chatter blog discusses the mortgage industry’s transition from LIBOR to a new adjustable-rate alternative, which is likely to be the Secured Overnight Financing Rate (SOFR).

Homeownership Rate, Homeowner Vacancy Rates See Slight Dip in 2Q

MBA – July 26

“Given this lack of housing inventory, household formation remains constrained, with nearly 1.2 million new households formed over the past year, and the majority of those new households choosing to rent.”

Demand Bounces Back in Houston’s Apartment Market

RealPage – July 24

“Apartment demand logged notable recovery in Houston during 2nd quarter 2019, when the market absorbed roughly 8,200 units.”

Video: The State of the Small Balance Multifamily Market (Part 2)

Arbor Chatter – July 25

“In Part 2 of this new video series from Arbor and Chandan Economics, we focus on the small balance multifamily market’s fundamentals and performance throughout this cycle.”

Minneapolis Grapples With Affordable Housing Shortage

Axios – July 24

“When this city became the first in the country to eliminate single-family zoning last year, the goal was to encourage developers to build denser housing in neighborhoods. But new construction is often unaffordable for lower-income residents.”

Multifamily Industry Prepares for LIBOR Transition

Arbor Chatter – July 23

“With LIBOR set to expire at the end of 2021, multifamily lenders are preparing to transition to an adjustable-rate alternative. Replacing such a widely used benchmark of the financial industry is a significant undertaking.”