Demand For Multifamily Rental Housing Still Strong Despite Slower Pace, Say Kip Cyprus, Industry Exp

By Author: Gavin Cameron
Total Articles: 6
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Demand for rental housing is still quite high, especially in the Los Angeles area, said Cyprus. And, according to a recent survey of executives at similar firms conducted by the National Multi Family Housing Council (NMHC), demand is still strong across the country. Even though the pace of new rental customers has slowed, firms like Ocean Development are still benefiting from continued growth, high occupancy rates and increasing rental rates.

“Even after nearly three years of recovery, apartment markets around the country remain strong as more report tightening conditions than not,” said NMHC Chief Economist Mark Obrinsky.

25 percent of respondents reported tighter rental markets, down from 55 percent in the previous quarter
14 percent of respondents reported looser markets
62 percent of respondents reported no changes in the market

Some of the slowdown can be seen in returns from apartment-related REITs, with FTSE NAREIT U.S. REIT Index data showing an average return of about 6.84 percent. However, as Obrinsky pointed out, “the increase in prospective apartment residents continues to outpace ...
... the pickup in new apartments completed.” At least part of the lag is due to low access to financing for new developments, which is an advantage for well-funded investment firms. This is particularly true for well-funded firms engaged in the low-income housing markets, since most traditional funding is flowing to the nicest properties.

Thus, overall conditions are still very favorable for apartment owners like Cyprus, and Ocean Development Inc., which work primarily to satisfy demand for quality housing at reasonable rates. And Cyprus points out that Ocean Development is still seeing above average returns thanks to a reputation for quality, low-income housing, and sound investment fundamentals. Rental development is still a sound investment, and Ocean Development is still an industry leader in the Los Angeles area, says Cyprus.

About the Author: Gavin Cameron loves writing on real estate matters, professionals associated with real estate, real estate development companies etc. He is now writing about Ocean Development, Inc. a real estate development company, which develops, constructs, owns, and sells residential housing units.