The multifamily sector has long been the darling of commercial real estate. It’s got the strongest fundamentals and greatest returns. And it’s the sector with the most access to financing for acquisition and development.
Such success has led to increasing concerns of overheating and overbuilding. But so far those fears have proven to be unfounded. Still, not every multifamily market is created equal.
Here, we take a look at the 10 markets that are forecast to generate the highest rental rate growth while maintaining high levels of occupancy.
It’s important to note that half of the list is located in California, and seven of the 10 markets are located on the West Coast. Only one market from the East Coast made the list: Miami.
All 10 of the markets will see significant new supply in 2014. Developers are doing their best to take advantage of the growth opportunities, yet none of these markets is in danger of being overbuilt because they have had a lack of supply over the past few years.
Other common characteristics these markets share are their ability to attract high-paying jobs and young, well-educated residents and their lack of affordable single-family housing. In particular, this is true of the Bay Area, San Diego and Orange County, Calif.
Do you agree with the list? Leave your comments below.