Analysts See Rise in Apartment Construction
Developers of apartment buildings are getting back in the game, betting that the improving economy and limited new construction will provide an opportunity for success.
Multi-family housing starts in January rose 9.2 percent, according to the U.S. Commerce Department.
Investors are encouraged by the number of people between the ages of 20 and 34 — prime renting age — which is expected to grow by 5 million over the next decade, says Hessam Nadji, managing director of Marcus & Millichap.
Plus, building costs — including labor, lumber, and concrete — have all fallen over the last two years.
"Apartment REITs (real estate investment trusts) may generate the best property net-operating-income growth that they've seen in a very long time, maybe ever," says Haendel St. Juste, a REIT analyst with Keefe, Bruyette & Woods Inc.
Source: The Wall Street Journal, Dawn Wotapka (03/03/2010)
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