Construction numbers are going down and demand is going up — two factors that should make for a stronger apartment market over the second half of 2010, according to the latest analysis by Marcus & Millichap Real Estate Services.
Of the 2,680 apartment units slated to be added to the local multifamily real estate sector before year’s end, construction on more than 80 percent of those units has already been completed — making for a quieter building market in the second half of 2010, Marcus & Millichap reports. That slowdown will give landlords a chance to shore up occupancy levels at their apartment communities.
Demand for units will indeed be on the rise — thanks in large part to the 2005 Base Realignment and Closure Commission (BRAC) action. This will result in Fort Sam Houston being home to the military’s largest medical training campus. The BRAC action is also bringing some 10,000 new employees to the area — an influx that should prove beneficial to the local apartment market, especially those catering to military personnel, the report states.
Given the dearth of quality properties coming to market, however, the investment side of the local multifamily real estate sector remains pretty quiet. While some investors have been targeting distressed assets, the bulk of active buyers are on the hunt for quality, cash-generating communities, the report shows.
But more investment-grade complexes may be headed to the sales block soon — including those owned by private, out-of-state entities who bought at the peak of the latest real estate boom and are now looking to divest themselves of those properties. That, Marcus & Millichap concludes, could make for some new buying opportunities for well-capitalized investor