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It’s Time for Multifamily to Get Flexible
With the rise of the gig and freelance economies, renters’ incomes are more dynamic and volatile than ever. Unfortunately, income variability can make it difficult for residents to pay their rent. Forward-thinking operators are meeting this challenge by using real-time income data to help residents manage their cash flows and to customize each resident’s rent payment schedule.
A Record Year for Adaptive Reuse Projects
The pandemic hasn’t slowed down the conversion of older office, hotel and retail buildings into apartment communities. In fact, apartment developers are on pace to complete more adaptive reuse projects in 2021 than in any other year in the last decade. And this activity isn’t likely to let up soon. “We will likely see a fair amount of this—redevelopment and converting properties to apartments—over the next few years,” John Sebree, senior vice president and national director of multifamily for Marcus & Millichap, told Wealth Management Real Estate. “That is the result of being in a housing crisis, and without new product being built at the same pace as demand.”
Self-Guided Tours Evolving for Single-Family Rentals
The multifamily and single-family rental sectors undoubtedly have any number of differences. But some considerable overlap exists between the two asset classes in terms of investment opportunities. Specifically, investors in both sectors are in pursuit of properties in suburban Sun Belt markets, where they’re often competing for the same types of renter households, namely dual-income families with relatively high incomes, FICO scores in the 600s and limited savings for a down payment.
IN THE NEWS
Capital Still Plentiful for the Apartment Industry
As 2021 enters its final months, industry experts say equity and debt financing remain abundant for apartment companies. “There’s so much capital that continues to come into the multifamily space overall that liquidity is not a challenge by any means,” Tim DeWispelaere, senior vice president and senior mortgage banker at KeyBank, told Multifamily Executive. “I think people are continuing to push the envelope in what they’re willing to invest as well as their counterparts in what they’re willing to lend.” Capital should continue to chase multifamily in the early part of next year, industry observers say.
The Next Phase of the Amenity Wars
The apartment amenity wars haven’t come to an end. Rather, the pandemic has helped generate a new front in the battles: financial amenities. The solutions operators are turning to include credit-building tools that add incentive for on-time payments, digital payments and flexible rental payments. Communities are finding that these amenities can make a much larger impact on residents than any rooftop pool, fitness center or dog park.
Emerging with a Bang
There’s no doubt about it: as the pandemic has begun to recede, the multifamily market’s fundamentals are thriving. Nationally, rents increased by 9.2% from January to June, according to Apartment List. Prior to the pandemic, rents in the U.S. increased an average of 2% to 3% in the first six months of the year. In addition, renters have begun to return to urban markets while secondary metros continue to experience strong demand.