The multi-family market has proven to be one of the best performing industries under the blows of the pandemic. Robust demand pushed rental growth to record highs, so 2021 is well on the way to becoming one of the best years since the 2008 downturn. The development triggered by demand and after a moderate decline during the first phase of the pandemic, construction activity is expected to pick up again in 2021. Yardi Matrix expects deliveries to increase by around 17 percent to 334,000 units.
Consistent growth was seen in almost all high-growth secondary markets, but also in several gateway metros. In this article, we show the top five markets for shipments by quantity through July based on Yardi Matrix data. In total, 44,168 units of these five metros were delivered in the first seven months of the year, which is slightly more than the 38,275 units that went online in the same period last year. In July, the construction pipeline in these markets comprised 170,913 units under construction. Unsurprisingly, four of these markets also took the top spots in terms of transaction activity in the first half of 2021.
1. Dallas
One90 fire wheel
Dallas-Fort Worth maintained its leadership position in the number of units added to the multi-family inventory from 2021 through July, with a total of 12,654 units. In addition, with 47,486 units under construction, it took the top spot in terms of the number of units under construction. It is surprising, however, that the Metro was the only one of the top 5 markets to record a slight year-on-year decline in the same period: from 2020 to July, 13,374 units went online in the Metroplex. Nonetheless, the demand in Texas’ most important economic engine is strong, because despite the robust expansion of the portfolio, the occupancy rate of the stabilized properties rose by 80 basis points to 94.7 percent in the twelve months to July.
North Dallas accounted for just over half of the units shipped on the subway from 2021 through July and saw the largest increase in load factor, which rose 120 basis points to 94.6 percent in July. Next came Fort Worth with 27 percent of deliveries and Suburban Dallas with nearly 22 percent. In the twelve months to July, the load factor in these regions rose by 60 and 40 basis points, respectively. The largest project delivered to DFW was One90 Firewheel, a 483 unit lifestyle asset that completed in January in North Dallas at 1675 West Campbell Road. The property is owned by the Integrated Real Estate Group and has a $ 51.5 million loan that was funded by Fannie Mae in April 2020.
2. Houston
Houston had a remarkable first seven months of inventory expansion. Developers had 9,511 units online by July, slightly more than the 8,167 units shipped in the same period last year, and an additional 30,078 units were in the works. The occupancy rate of the stabilized properties rose by 60 basis points to 92.9 percent in the twelve months to July.
Especially on the west side there is a lot of activity, the region accounts for 86 percent of the total deliveries. Nevertheless, the load factor here rose by 80 basis points to 93.1 percent in July. The eastern part recorded lower demand, with the number of multiple families growing by 14 percent and occupancy increasing by only 10 basis points to 92.3 percent. The largest multi-family project delivered from 2021 through July was Broadstone Vintage Park, a 386-unit lifestyle property that was completed in March in west Houston on 14700 Vintage Preserve Parkway. The asset was acquired by Alliance Residential Co.’s Shidler Group using a $ 49.5 million loan from Webster Bank.
ALSO READ: Top 5 markets for transactional activity in 2021
3. Atlanta
Star Metals Residences
Developers added 8,596 units to Atlanta’s multi-family inventory from 2021 through July, far more than the 5,418 units shipped in the same period last year. A further 21,007 units were in progress on the construction pipeline. Overall, the letting rate of the stabilized properties rose by 130 basis points to 95.7 percent in the 12 months that ended in July.
Deliveries were almost uniform across the map, with 55 percent of new inventory going online in urban Atlanta and 45 percent in the subway suburbs. The occupancy rate reflected balanced demand for apartment buildings in both the suburban and urban sub-markets. Year-on-year to July, the rate rose 140 basis points to 96.2 percent in suburban areas and 130 basis points to 95.1 percent in urban sub-markets. The largest project delivered on the metro by July was Star Metals Residences, a 409-unit lifestyle community that was completed in urban Atlanta at 1050 Howell Mill Road in January. The property is jointly owned by Allen Morris and Pebb Capital and was built using a $ 68.6 million home loan funded by Pacific Western Bank.
4. Miami
Las Olas Walk
The pandemic has made this Florida market even more attractive for businesses looking to relocate from both New York City and California, which has resulted in robust demand for multi-family projects. By July, 7,173 units went online in the subway, and more than 6,625 units were delivered in the same period last year. The construction pipeline ranks second after Dallas and Washington, DC, with 38,147 units. Miami is also one of the top markets in terms of absorption, seeing the occupancy rate for stabilized properties rise 180 basis points to 96.4 percent in the 12 months to July.
Deliveries were almost even between Miami Metro (2,391 units), Ft. Lauderdale (2,648 units) and West Palm Beach – Boca Raton (2,134 units). In terms of utilization, however, the highest demand was recorded in the latter, where the rate rose by a significant 250 basis points to 96.6 percent in the 12 months to July, followed by Miami Metro (plus 160 basis points to 96.2 percent). ). In Fort Lauderdale, the rate rose 150 basis points to 96.4 percent during the period. One of the largest projects delivered on the subway from 2021 to July was Las Olas Walk, a 456-unit lifestyle property that was completed on 106 South Federal Highway in Fort Lauderdale in February. The ZOM Living facility was built using a $ 91 million home loan from PNC Bank.
5. Phoenix
Paradise on P83
The fast-growing tech hub consistently held the top spot among the major metropolises in terms of rental growth – aided by strong demand and insufficient supply – and the volume of transactions. Developers worked hard to meet demand, bringing 6,234 units online from 2021 to July, far more than the 4,691 units shipped in the same period last year. In addition, the subway construction pipeline comprised 34,195 units under construction.
The strong influx of more expensive subways prompted developers to continue to focus on the lifestyle segment, which led both in deliveries and in units under construction. The occupancy rate in stabilized properties signals an increasingly narrow rental market and rose in the 12 months to July by 110 basis points to 96.5 percent. The largest multi-family shipment from 2021 to July was Paradise in P83, a 354 unit that was completed in 16601 North 75th in July. Ave. The Opus Group built it with the support of a $ 39 million home loan granted by UMB Bank.
[ad_1]
