Written by Beth Mattson-Teig | November/December 2016
Developers have been busy delivering new projects to satisfy growing renter demand. Yet given the volume of new projects still in the pipeline, some are beginning to wonder whether the market may be approaching a tipping point for oversupply.
Industry data continues to paint a picture of a robust market. Economic and job growth along with favorable demographic trends have created a near perfect storm for apartment investors with healthy absorption, occupancies, and rent growth. The wild card in the mix that owners, investors, and lenders are all keeping a close eye on is the fat development pipeline.
Statistics on the amount of new properties that have been completed and pending vary widely depending on the source. According to the Freddie Mac 2016 Multifamily Outlook, 2015 completions reached 306,000 units – the highest level in 26 years.
The 2016 Dodge Construction Outlook estimates an even higher volume, with 405,000 units that were completed last year and another 480,000 units that are expected to be added this year. Where data sources agree is that construction has taken a big leap forward with more deliveries ahead. The new development is providing more choices for both renters and investors who are still hungry to acquire properties.
Jack Herrington joined Saurage Rotenberg Commercial Real Estate in October, 2016. He has extensive experience in the service industry, prior to beginning his career in real estate. Jack is currently pursuing his Certified Commercial Investment Member (CCIM) designation through the Commercial Investment Real Estate Institute.
Saurage Rotenberg Commercial Real Estate is a member of the Baton Rouge Area Chamber of Commerce (BRAC); the West Baton Rouge Chamber of Commerce; the Baton Rouge Better Business Bureau; the Louisiana Commercial Data Base (LACDB); and the International Council of Shopping Centers (ICSC). Several agents, on an individual basis, are members of the Society of Industrial and Office Realtors® (SIOR), the Certified Commercial Investment Member Institute (CCIM); the National Association of REALTORS® (NAR); and the Greater Baton Rouge Association of REALTORS® Commercial Investment Division (CID).