Demand and Rents are Increasing
The number of renters has increased consecutively for 12 years, rising by 600,000 in 2016 alone, with a net growth of nearly 10 million since 2005¹
Long Term Rent Growth
Rent growth is estimated to average 2.3 percent in 2017, matching the long-term average from 1995 – 2016, and occupancy is expected to average 94.6 percent in 2017²
Apartments And Multifamily Communities
- Capital Square targets multifamily communities with hundreds of apartment homes. Therefore, the success of a community does not rely on one or even several particular tenants. Tenant risk is eliminated through diversification.
- Capital expenditures required to prepare vacated apartment homes for new tenants or to maintain a community’s common areas are generally lower compared to office or retail properties. An apartment community generally won’t require the landlord to complete large capital expenditures at one time to obtain new tenants, whereas such expenditures may be required at an office or retail property.
- Ownership is not locked into a long-term lease with tenants. Lease terms are generally 12 months, which allows a landlord the potential to reset a rental rate based on the market more often than a typical office or retail lease.
- There may be opportunities through community improvements, apartment upgrades and other management strategies to obtain higher rents upon each lease expiration.
- Favorable financing is often available.
- Shelter is a necessary expense.
- “The State of the Nation’s Housing Report 2017, Joint Center for Housing Studies of Harvard University
- Source: https://www.axiometrics.com/resources/axio-media/blogs/2017-forecast-rent-growth-to-match-long-term-average/.
- JLL Multifamily Investment Outlook (Q2 2016)
- Quarterly Residential Vacancies and Homeownership, First Quarter 2017, U.S. Census Bureau
- The Mercury News, Housing Experts Examine Five Root Causes of Low Homeownership Rate, June 16, 2017