Development will play a key role in the U.S. multifamily market in 2018. Developers are poised to register the second-highest annual completions count of this cycle, with as many as 258,000 units delivered. This is based on 62 markets tracked by CBRE Econometric Advisors.
This would be down by 9.2% from 2017’s cycle peak, projected at 284,000. Apartment starts began to slow in 2017, so the multifamily market will get a reprieve from new supply by late 2018 and throughout 2019.
Starts will continue to slow in 2018, as banks have scaled back development lending over the past two years. While other sources of development capital have emerged (e.g., debt funds) or reemerged (e.g., HUD financing), the climate for financing new development should remain more conservative, and debt capital costs more expensive.
For more, download CBRE’s free 2018 Multifamily Outlook report (registration required).
As of December 2017, nearly 23% of all units under construction in U.S. markets are in urban cores. In the long term, urban core multifamily will perform well, but for the short term, market statistics indicate that the best development opportunities are in the suburbs.
Suburban markets have seen the highest rent growth rate over the past two years.
Related Stories
MFPRO+ New Projects | May 29, 2024
Two San Francisco multifamily high rises install onsite water recycling systems
Two high-rise apartment buildings in San Francisco have installed onsite water recycling systems that will reuse a total of 3.9 million gallons of wastewater annually. The recycled water will be used for toilet flushing, cooling towers, and landscape irrigation to significantly reduce water usage in both buildings.
MFPRO+ News | May 28, 2024
ENERGY STAR NextGen Certification for New Homes and Apartments launched
The U.S. Environmental Protection Agency recently launched ENERGY STAR NextGen Certified Homes and Apartments, a voluntary certification program for new residential buildings. The program will increase national energy and emissions savings by accelerating the building industry’s adoption of advanced, energy-efficient technologies, according to an EPA news release.
MFPRO+ News | May 24, 2024
Austin, Texas, outlaws windowless bedrooms
Austin, Texas will no longer allow developers to build windowless bedrooms. For at least two decades, the city had permitted developers to build thousands of windowless bedrooms.
Mass Timber | May 22, 2024
3 mass timber architecture innovations
As mass timber construction evolves from the first decade of projects, we're finding an increasing variety of mass timber solutions. Here are three primary examples.
Mixed-Use | May 22, 2024
Multifamily properties above ground-floor grocers continue to see positive rental premiums
Optimizing land usage is becoming an even bigger priority for developers. In some city centers, many large grocery stores sprawl across valuable land.
MFPRO+ News | May 21, 2024
Massachusetts governor launches advocacy group to push for more housing
Massachusetts’ Gov. Maura Healey and Lt. Gov. Kim Driscoll have taken the unusual step of setting up a nonprofit to advocate for pro-housing efforts at the local level. One Commonwealth Inc., will work to provide political and financial support for local housing initiatives, a key pillar of the governor’s agenda.
MFPRO+ News | May 21, 2024
Baker Barrios Architects announces new leadership roles for multifamily, healthcare design
Baker Barrios Architects announced two new additions to its leadership: Chris Powers, RA, AIA, NCARB, EDAC, as Associate Principal and Director (Healthcare); and Mark Kluemper, AIA, NCARB, as Associate Principal and Technical Director (Multifamily).
MFPRO+ News | May 20, 2024
Florida condo market roiled by structural safety standards law
A Florida law enacted after the Surfside condo tower collapse is causing turmoil in the condominium market. The law, which requires buildings to meet certain structural safety standards, is forcing condo associations to assess hefty fees to make repairs on older properties. In some cases, the cost per unit runs into six figures.
Mass Timber | May 17, 2024
Charlotte's new multifamily mid-rise will feature exposed mass timber
Construction recently kicked off for Oxbow, a multifamily community in Charlotte’s The Mill District. The $97.8 million project, consisting of 389 rental units and 14,300 sf of commercial space, sits on 4.3 acres that formerly housed four commercial buildings. The street-level retail is designed for boutiques, coffee shops, and other neighborhood services.
Adaptive Reuse | May 15, 2024
Modular adaptive reuse of parking structure grants future flexibility
The shift away from excessive parking requirements aligns with a broader movement, encouraging development of more sustainable and affordable housing.