Suburban garden-style apartments are 2022’s comeback kid

 

Everybody loves a good comeback story, whether in sports, the entertainment industry, politics, or business. And there’s no bigger rental real estate comeback story in 2022 than that of the garden-style apartment – from both a new-build and investment perspective. According to Cushman & Wakefield, garden-style apartments had a $60 billion influx of capital in 2021, or 28% more than in 2017-2019, far outpacing other styles like suburban mid- and high-rises.

So, what exactly is driving this resurgence? Why now and not five years ago? To understand the present surge in garden-style rentals, we must first understand their past.

From Boom to Backburner Garden-style apartments first rose to prominence stateside after WWI, influenced by England’s Garden City approach to urban development, which emphasized self-contained communities with lower-density residences, industry, and agriculture, plus green space, according to CUNY historian Joshua B. Freeman. One of the country’s earliest examples is Sunnyside Gardens, in Queens, New York.

By the late 1960s, garden-style apartments were the most popular style of rental option in the suburbs, according to Samuel Paul in his book Apartments: Their Design and Construction, and remained popular through the 1970s and 1980s.

But as all commercial assets have their ups and downs, the suburban locales and low-rise architecture of garden-style apartments began to take a backseat from the ‘90s through 2020 as urban renewal took hold and developers followed renter demand to cities and suburban downtowns where walkability and density reigned supreme. From 2010-to 2020, Chicago’s Loop saw a 45% increase in residents and became not only the fastest-growing neighborhood in Chicago but the fastest-growing downtown in the country, per a report from the Chicago Loop Alliance.

The Roaring ‘20s  Then, the COVID-19 pandemic arrived and soon the same fundamentals that made garden-style apartments so attractive to renters 50 years ago, such as easy access to the outdoors and less density, suddenly became very in-demand once again. But unlike in decades past, today’s garden-style apartments are more likely to resemble their high-rise brethren with Class A amenities like resort-style pools, commercial-grade fitness centers, designer finishes, an in-unit washer and dryer, demonstration kitchens, coworking areas, and pet spas.

According to many of our clients, demand for garden-style suburban apartments has never been higher – whether building new or buying an older asset with long-term value.

One developer that’s bullish about this multifamily sector is Wingspan Development Group. No stranger to building Class A rentals in suburban downtowns, Wingspan has two active garden communities that even in their early stages are performing ahead of expectations. Located near the intersection of U.S. 30 and Highway 126 in Plainfield, Illinois, about 40 miles southwest of Chicago, Sixteen30 consists of 284 units in eight garden-style buildings with neo-farmhouse exteriors surrounding a 7,500-square-foot clubhouse and pool, the social center of the community with its great room, coffee bar, fitness center with smart technology and cardio training, yoga studio, bocce court, demonstration kitchen, pet spa, and other luxe amenities. There is also a 24-hour package room. Stylish interiors that all demographics of renters have come to expect from new construction include 9-foot ceilings, vinyl plank flooring, kitchens with stainless, quartz, and ceramic tile backsplashes, space to work from home, and more.

Plainfield has experienced a steady rise in luxury single-family-home building in recent years, but not much Class-A rental – and there is a real appetite for it in the area, according to Chris Coleman, vice president of development for Wingspan. Demonstrating that demand, Sixteen30 surpassed the 30% leased milestone in just over three months and has waitlists for the next available buildings.

“With the rise of remote work allowing renters to work from anywhere, suburban living has become highly desirable, and we don’t see that slowing down anytime soon,” Coleman added. Chicago’s suburban rental occupancy rose from 95.3% to 97.8%, and median rents rose 12.6%, between Q3 2020 and Q3 2021, according to Integra Realty Resources. “The new work-from-home option has also prompted one of the biggest innovations in garden apartment design: creating coworking spaces in clubhouses, from shared tables and multiple scattered seating arrangements to dedicated private offices.”

Similarly, Wingspan’s Hub13, being built with Batson-Cook Development Company (BCDC) in Oak Creek, Wisconsin – just off Interstate 94 and near the Milwaukee airport – is one of the first Class-A rental communities in the area with resort-style amenities like a Zen Garden. It too has a highly curated amenity package for renters by choice, including immediate access to an adjacent 11.2-acre nature preserve and wetlands.

“That’s another change in recent years – how we’ve come to value outdoor space even more since the pandemic, for ourselves, families, and pets,” Coleman noted. “By design, garden-style apartments offer more access to green space than you find in a typical high-rise or even suburban downtown rental.”

Seconding Coleman’s stance on the uptick in low-rise apartments is McHugh Construction, one of the Midwest’s largest commercial contractors with a concentration in high-end multifamily projects.

“We’ve seen a lot of new bidding opportunities on low-rise apartment projects in the suburbs – certainly more than we saw pre-pandemic,” said Dave Bartolai, vice president of McHugh Construction. “Wood-framed apartment complexes are popular for wide-open land sites as well as stacked developments along Metra train lines.”

Illustrating the demand from investors for low-rise apartments, one community McHugh built-in 2017 for M&R Development – The Residences at Hamilton Lakes in Itasca, Illinois – recently sold to investor JVM Realty Corp. for $99 million in January 2022. An upscale wood-framed garden-style apartment with 297 units in three four-story buildings centered around a clubhouse with resort-style amenities, The Residences at Hamilton Lakes offered “a perfect blend of luxury and location,” according to JVM.

Investors Smell Sweet Returns with Value-Add Opportunity in Garden-Style Investor interest in vintage garden-style apartment rental properties with 100-plus units increase in popularity over the past two to three years, specifically in DuPage County. The population flight back to the suburbs from the city due to COVID-19 helped spur this interest among investors, he said, but there was already an appetite for these types of properties right before the pandemic started due to such things as the uncertainty over property tax escalation in Cook County.

There’s currently a great need for workforce/essential housing, especially in the suburbs. The garden-style apartment complexes built in the 1960s, ‘70s, and ‘80s are solid investments because they traditionally have very low vacancy rates due to the demand for affordable rents, which are typical for these types of buildings compared to newer construction luxury properties. The garden-style properties also provide value-add opportunities, which is a huge draw for multifamily investors.

They want that value-add where they can go in and make upgrades to some of the units. The short-term costs of these capital improvements lend themselves to longer-term gains by being able to collect higher rents in the future and retain long-term tenants. The risk tolerance for investors is low.

And in February, Ellyn Crossing (formerly Stonegate Apartments), a 1,155-unit vintage garden-style property in Glendale Heights sold for $137 million, making it the biggest suburban Chicago apartment deal ever, according to Real Capital Analytics, a New York-based research firm. Now that’s a comeback story.

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Source: Suburban garden-style apartments are 2022’s comeback kid

https://www.creconsult.net/market-trends/suburban-garden-style-apartments-are-2022s-comeback-kid/

Car Washes are Shining Up Balance Sheets in Sale-Leaseback Deals

 

Buyers seeking tax breaks have been spiffing up their portfolios by gobbling up mom-and-pop operations.

One of the hottest retail properties attracting sale-leaseback buyers is a drive-through location where you can’t open your window.

“Car washes are the hottest specialty product in sale-leasebacks right now,” Camille Renshaw, CEO, and Co-Founder of B+E, told GlobeSt this week at the Net Lease Spring conference in New York.

“There are a lot of mom-and-pop locations being gobbled up right now. They’re being correlated into larger credits and they’re attracting buyers who want to write off capital gains,” Renshaw said.

Buyers are lining up to purchase triple-net leased car washes specifically to take advantage of bonus depreciation deductions of up to 100 percent on property improvements allowed by the Tax Cut and Jobs Act passed by Congress in 2017, she said.

Under the 2017 tax bill, 100-percent bonus depreciation will be allowed until the end of this year; in 2023, the maximum deduction will be reduced to 80 percent. Deductions will be reduced by another 20 percent annually until they are completely phased out in 2027.

According to Renshaw, the subscription model embraced by car wash owners also makes them a uniquely stable asset.

“The subscription model that is popular with car wash owners creates a more level P&L over a 12-month period, instead of just in pollen-heavy seasons when everyone wants to clean their cars,” she explained. “You don’t get that with any other retail asset.”  Renshaw added that “there’s still a learning curve” for institutional investors who don’t understand the subscription model.

B+E arranged seven net-leased car wash transactions in the second half of last year for a collective total of $35M. According to the company’s website, cap rates have been declining for these coveted properties.

It said last year’s deals had cap rates within a 100-basis-point range from 6.5% to 5.5%, with the last three transactions all executed below the 6% rate.

RealSource Group recently announced the sale of over $51 million in express car wash sale-leasebacks during 1Q 2022. The deals involved 10 single-tenant net-leased sites located throughout the Midwest and Southeast.

“We generated multiple all-cash offers for 10 single-tenant car wash transactions and procured a different buyer for each transaction to achieve the highest price possible,” RealSource Senior VP of Investment Sales Austin Blodgett said in prepared remarks.

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Source: Car Washes are Shining Up Balance Sheets in Sale-Leaseback Deals

https://www.creconsult.net/market-trends/car-washes-are-shining-up-balance-sheets-in-sale-leaseback-deals/

Affordability Spread Remains Large Despite Multifamily Rent Escalation

 

Home prices climbing, despite a slowdown in buying.

For the first time since 2019, the average rate for a 30-year mortgage breached 4 percent in March, then accelerated at an even faster pace, following the Fed’s first interest rate hike in over four years. Higher mortgage rates make houses less affordable, in an environment where elevated prices are already an inhibiting factor. In February, fewer existing homes sold than in any of the previous five months, as the number of existing homes available for purchase declined for the seventh straight month. The record-low supply and sturdy demand is maintaining upward pressure on values, with the median sale price reaching $382,200 in February, up 15.4 percent year-over-year. These conditions reinforce the multifamily segment’s demand surge, as the gap between mortgage and rent payments is wide, despite the recent swell in effective rents.

Apartment rent gains catching up to home prices. Preliminary estimates for the first quarter of 2022 show a 16.8 percent lift in average effective apartment rents in the United States, slightly faster than the annual price leap for homes. The formidable apartment rent increase is facilitated by extremely tight vacancy, with tenants competing for record-low volumes of available units in markets across the country. The national rental vacancy is estimated at just 2.4 percent for March 2022, almost 200 basis points below the 2019 register. Metros across the Sun Belt are recording the steepest rent climbs relative to home price growth. The six largest Florida markets, along with Charlotte and Atlanta, each had 2021 average effective rent jumps that were 1.5 times faster than their respective median home price rises. Young adults are moving to these markets in waves, aligning well with apartment demand.

Single-family rentals are not the lead cause of high prices. More REITs and corporations are exploring single-family homes as an alternative investment option. These well-capitalized groups often outbid individuals and private buyers, contributing to rising prices. Nonetheless, fewer than 2 percent of single-family rentals are owned by major institutional groups. They are playing a minor role, but the price lift is intrinsically driven by a housing shortage.

Developing Trends

Interest rate hike expedites mortgage rate ascent. The 30-year mortgage rate has been steadily climbing, and the Fed’s announcement of an increase to the benchmark rate sped up the pace of growth in mid-March. Messaging from the Fed implies that several aggressive rate hikes are in store as the year progresses, which could move mortgage rates up past the 2010-2019 peak of 5.1 percent. This would likely soften demand for single-family homes and begin to alleviate the supply-demand imbalance that has persisted throughout the pandemic.

Permit activity indicates some additional relief. The single-family sector has been starved for development over the course of the health crisis, as inventories plummeted amid robust buying activity. Builders had a difficult time keeping pace with demand, as material costs soared and labor shortages impeded project timelines. These headwinds remain in force, though recent permit activity signals a rise in future completions. Single-family permits in February were up 5.2 percent year-over-year, while project starts advanced 13.7 percent.

-2.8%	22.3%
Year-over-Year Change in Total Residential Completions	Year-over-Year Change in Total Residential Project Starts

  

* 2022 Q1 figures are preliminary estimates Sources: Marcus & Millichap Research Services; Capital Economics; Freddie Mac; Moody’s Analytics; Mortgage Bankers Association; National Association of Home Builders; National Association of Realtors; RealPage, Inc.; U.S. Bureau of Labor Statistics; U.S. Census Bureau; Wells Fargo

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Source: Affordability Spread Remains Large Despite Multifamily Rent Escalation

https://www.creconsult.net/market-trends/affordability-spread-remains-large-despite-multifamily-rent-escalation/

15 Tax Deductions for Landlords During Tax Season

 

Any game is hard to win if you don’t know the rules. Being a landlord is no different. Oftentimes, juggling tenant needs, paying insurance premiums and mortgages on time, and squaring up at tax season can feel like a chess game where the pieces keep changing.

While the objective is a successful rental business, that’s not always possible. Given that 36% of rental businesses fail in the first five years according to AdvisorSmith, it’s crucial to do everything you can to maximize profits and come out triumphant.

One way to keep more of what you earn is to minimize expenses. Most landlords already understand the cost-saving importance of knowing how to set the right rental rate and reducing the risk of evictions with thorough renter background checks through a high-quality service like SmartMove.

However, fewer landlords are aware of the range of tax breaks available to property owners and managers—opportunities that could help you save big. With many renters and landlords recovering after a financially tumultuous few years, it's more important than ever to help protect your investment.

Below, you’ll find 15 deductions that could help you during tax season. While some of these tax breaks apply to all homeowners, many are unique to rental property. Make sure to check with your tax professional or CPA to determine whether any specific tax deduction applies to you and make the most out of your return.

As you work on this year’s tax returns, keep the following deductions in mind:

1. LONG-DISTANCE TRAVEL

If you have to travel long distances to check on your property, Moolanomy reports you can deduct the cost of your travel expenses. Examples of deductible expenses include car mileage, airfare, or hotel costs.

2. MORTGAGE INTEREST

If you didn’t purchase your rental property outright, you probably have a mortgage. If you do, you’re paying interest to a bank. According to SmartAsset, landlords can deduct their mortgage interest as a rental expense.

This well-known rental property tax deduction applies to all homeowners. Still, it’s especially important for landlords to use because it’s usually the biggest deduction they can claim.

3. PERSONAL PROPERTY TAXES

You may be required by your local government to pay personal property taxes on equipment and furniture used for business purposes, based on the value of the property. Most landlords are aware that they can depreciate their personal property, but did you know that you can depreciate personal items used in and for your rental business at a faster rate

All Property Management explains that with the Modified Accelerated Cost Recovery System, you may save more money by fully depreciating personal property inside the rental unit over a shorter period. For example, appliances, carpeting, and furniture can be depreciated over a five-year period. Other items, like fences and driveways, can be depreciated at a 15-year rate. You can check to see which asset class your property falls into on the IRS website.

4. REPAIRS

The IRS splits repairs into two types:

1. Improvements to the property (which increase the value) or
2. Returning things to their original condition (maintenance)

Bigger Pockets notes that while improvements must be capitalized and deductions taken as depreciation over time, repairs and maintenance costs can be expensed in a single year.

Nolo.com offers the helpful BAR acronym to help you decide if your repairs are simply maintaining the property or could be considered improvements:

• Betterment. Does the change fix a defect in the property that existed before you bought it Does it physically enlarge or enhance the property in any way?
• Adaptation. Are you going to use the property in a new or different way than you originally intended when you purchased the property?
• Does the change rebuild the property to a like-new condition Have you already taken a loss for the damage

If you can answer yes to the above questions or your repair falls into any of these categories, it would likely be considered an improvement by the IRS, which needs to be depreciated.

5. LOCAL TRAVEL

Many landlords like to routinely check in on their tenants and property. You might also need to handle maintenance, repairs, or improvements on-site. If you use your personal vehicle to make the trip, you can deduct the cost of travel using one of two different methods:

1. Actual expenses or
2. IRS standard mileage rate.

FindLaw.com says there’s a caveat if you’re using the IRS standard method. In order to qualify, a landlord must use this method during the first year that the vehicle was used in rental business activity. The actual expense method allows you to deduct the actual vehicle expenses, as well as depreciation.

According to the IRS, the local travel deduction can include gas, oil, lease payments, licenses and fees, repairs, tolls, and parking. Calculate your deduction both ways to see which method benefits you most.

6. LEGAL FEES FOR AN EVICTION

Often a landlord's worst nightmare, eviction proceedings are extremely stressful and can bankrupt small rental businesses. If the worst happens and you’re forced to evict or take legal action against a tenant, Sapling says you can deduct court fees and attorney costs.

However, even if some of those expenses can be deducted, such a financial hit could decimate your profits. SmartMove estimated that total eviction-related expenses averaged $3,500. How would your business fair with such hefty fees

In addition to monetary cost, there is also the intense worry of an ongoing legal battle and the pressure of not knowing what could come next. While it’s good to save money by claiming landlord tax deductions, it’s better to prevent evictions in the first place by thoroughly and consistently screening your tenants before they're allowed to move in.

Bolster your tenant screening process with detailed, near-instant background checks that include criminal checks, renter credit reports, and eviction history with SmartMove. Getting an in-depth look at a rental applicant’s background and track record can help you make more informed, timely screening decisions.

7. HOME OFFICE

If you use a dedicated space in your home to conduct rental business, it is a deductible expense–even if it’s not a whole room. HomeGuides points out that a deductible space must be an area used exclusively for rental activity, and used as a primary meeting place for clients and customers.

Money Crashers also reminds you that any equipment must also be used exclusively for business. For instance, your work computer shouldn’t be used to play games or for other personal reasons.

There are several ways you can calculate the business portion of your house as an expense in order to find the largest deduction. According to Money Crashers, you can:

• Calculate your space’s square footage divided by the square footage of your entire house if all the rooms in your house are roughly the same size, divide the number of rooms your business space encompassed by the total number of rooms in the house
• Use a prescribed rate multiplied by the allowable square footage used in the home. For 2021, the prescribed rate is $5 per square foot with a maximum of 300 square feet.

Note that you can deduct a portion of your home repairs if they partially affect your office and the full price of the repair if it only affects your office. However, you cannot use these deductions if you have an outside office as well, or if you’re renting the space to your employer.

8. WAGES FOR EMPLOYEES AND INDEPENDENT CONTRACTORS

If you hire a property manager or grounds maintenance worker, you can deduct their wages as a rental business expense. This also holds true for independent contractors like carpenters or electricians.

According to Nolo, one of the benefits of hiring independent contractors is that you don’t have to withhold federal taxes out of their paycheck or pay one-half of the worker’s Social Security and Medicare taxes. However, you do need to file IRS Form 1099-MISC if you pay them over $600 during the year.

And don’t forget employee meal and entertainment expenses. Turbo Tax reminds landlords that events like holiday parties or summer outings for your staff are 100% deductible. If you incur an expense while doing business with a potential client or business associate, you can deduct 50% of the total.

9. CASUALTY LOSSES

If anything happens to your property due to an unexpected event like a natural disaster or fire, you can claim a total or partial property loss on your tax return. However, as Nolo points out, you can only claim losses to the extent that they aren’t covered by insurance.

If you do have insurance, you must reduce the amount of your claimed casualty loss by any insurance recovery you receive (or expect to receive, if you haven’t been paid yet). Losses that are fully covered by insurance are not deductible.

10. DEPRECIATION

Depreciation is a deduction you can take for property and items that you own for over one year. The cost of qualifying items are deducted in small amounts over a set number of years. For example, rental buildings are depreciated over 27.5 years. This means that you can deduct about 1/27 of your rental property annually.

SF Gate points out that depreciation is actually required by the IRS. Depreciation claims don’t just save you money, but they might also keep you out of legal hot water. Also, if you sell the property for more than the depreciated value, the IRS may charge you a 25% recapture tax, whether or not you actually claimed depreciation. It makes more sense to claim the depreciation than to eventually pay taxes on a benefit you never received.

11. INSURANCE

According to Steadily, the on your rental are deductible. This includes fire, theft, and flood insurance for your rental property, plus landlord liability insurance. If you have employees, you can also deduct the cost of their health and workers' compensation insurance.

12. CAPITAL EXPENSES

Nolo offers some helpful information for understanding how landlords can deduct long-term assets, but we’ll go over the basics here. In terms of tax rules, there are two different types of expenses that are incurred as a rental property business: current and capital.

1. Capital expenses are defined as purchases that are expected to last more than one year and generate revenue in the future. This might include equipment, land, or vehicles, but keep in mind these are not the only capital expenses. Such purchases are treated as investments by the IRS and must be deducted (or capitalized) over a number of years.
2. Current expenses are the day-to-day operational expenses that keep your business running, such as rent and utilities. You can deduct 100% of current expenses from your gross rental income in the year they are incurred.

13. PROFESSIONAL SERVICES

In addition to the legal services mentioned above, other professional assistance can be deducted, as well. Consulting a tax professional is not only advisable but also a deductible expense. According to Forbes, attorneys and accountants can be deducted from your taxes, as long as the reason you are hiring them is related to your rental business.

Since IRS regulations are regularly updated or changed, hiring an accountant to file your taxes can keep you from overlooking any deductions available to you. If you do decide to handle your taxes yourself, the same deduction is applicable if you use tax preparation software.

14. OPERATING EXPENSES

Many items that you purchase for your rental property throughout the year can be classified as operating expenses and deducted in the year during which you purchase them. The IRS website defines these expenses as “the ordinary and necessary expenses for managing, conserving and maintaining your rental property”. Appropriate expenses that are generally accepted as necessary for a rental business might include:

• Advertising
• Maintenance
• Utilities
• Insurance

15. MAINTENANCE

You might be tempted to put maintenance in the repairs category, but the ongoing upkeep of your property doesn’t necessitate something being broken. For example, landscaping and pool cleaning is done on a regular basis, even when there are no major issues.

You can also deduct any tools needed for cleaning or upkeep, such as lawnmowers, weed eaters, or paint sprayers. In some cases, it may be necessary to depreciate these tools, so check with a tax professional if you have any doubts. The same holds true for cleaning supplies and janitorial items. According to HOA Sites, you can even deduct Homeowner Association fees as a rental expense.

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Source: 15 Tax Deductions for Landlords During Tax Season

https://www.creconsult.net/market-trends/15-tax-deductions-for-landlords-during-tax-season/

Multifamily Demand Sets New Highs in Q1

 

In a world of growing uncertainty, there’s one thing that seems dependable, at least in commercial real estate: the need for housing keeps rising. First-quarter data from RealPage shows historically unprecedented demand, occupancy, and rents in the multifamily market.

Net demand for apartment space hit 712,899 units over the 12-month period ending in March 2022, according to the firm. “That’s 8% more than the previous high set one quarter earlier, and 76% higher than the pre-COVID-era peak set back in 2000,” the report reads.

Although occupancy usually falls a bit in the first quarter, it increased 10 basis points to 97.6%. Year-over-year rent growth in new lease asks was 15.2% in March. Florida dominates the markets as eight out of ten of the largest year-over-year areas for rent growth. Out of the Sun Belt, New York hit the top spot for net demand. “Similar trends were seen to a lesser degree in other big coastal markets like San Jose, San Francisco, Oakland, Los Angeles, Seattle, Northern New Jersey, and Washington, DC,” the report noted.

“Young adults benefiting from a tight labor market and unprecedented wage growth are flooding the apartment market,” Jay Parsons, head of economics and industry principals at RealPage, said in prepared remarks. “Normally, you’d expect rent growth of this magnitude to stifle demand, but instead the opposite is occurring. There’s a severe shortage of rental housing at all price points and in essentially every city across the country.”

Perhaps because there’s been a severe lack of housing construction for years according to professional groups. Real estate economics consultancy Rosen Consulting Group and the National Association of Realtors noted last year, “While the total stock of US housing grew at an average annual rate of 1.7% from 1968 through 2000, the U.S. housing stock grew by an annual average rate of 1% in the last two decades and only 0.7% in the last decade.” And the National Multifamily Housing Council reports that the sector needs to build an average of 328,000 new apartments per year at a variety of price points to keep up with demand. “We’ve only hit that mark three times since 1989,” it said.

Combining this with the long-term lack that others have reported is the accelerating costs of construction, according to RealPage. But currently, owners and operators can push costs along. “We wouldn’t see this huge surge in apartment construction if not for wage growth empowering renters to absorb the cost increases through higher rents,” says Parsons. “Ultimately, rents and home prices are both surging right now primarily due to housing shortages, and we need more housing of all types to support long-term affordability and availability.”

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Source: Multifamily Demand Sets New Highs in Q1

https://www.creconsult.net/market-trends/multifamily-demand-sets-new-highs-in-q1/

ESG and Future of Real Estate panel discussion

 

Environmental, Social and Governance (ESG) scores have become a hot topic in real estate in recent years, and with a heightened focus on clean energy infrastructure, it is expected that ESG scoring will be mandatory on all commercial and residential properties in this decade. Join us for an “ESG and Future of Real Estate” panel discussion at our Commercial Real Estate Symposium where experts will explore these questions and many more to help you prepare for what’s to come. Panelists include: ▪️ Johan Tellvik, CEO, JT Consulting ▪️ Mike Miller, Founder and COO, Enriched Data ▪️ Bob Greenlee, Founder and CVO, E3SG Realty Investments, LLC

 

https://www.creconsult.net/market-trends/esg-and-future-of-real-estate-panel-discussion/

Chicago holds the top spot for Midwest rent growth

 

While the country’s most stunning apartment rent growth performances are seen in the Southeast (especially Florida) and in the Mountain/Desert region, prices are climbing at record levels almost everywhere. That includes the typically slow-and-steady performers in the Midwest.   Among the Midwest’s largest markets, Chicago holds the top spot for rent growth. Institutional Property Advisors (IPA) stats for Q1 show typical pricing for move-in leases up 17.6 percent. Leading the way on the neighborhood level, there are huge price hikes in the metro’s urban core submarkets that had recorded sizable rent cuts in 2020.   Elsewhere across the Midwest, larger metros generally post annual rent growth in the range of 10 to 14 percent. That’s the general level of increase seen in Cincinnati, Cleveland, Columbus, Detroit, Indianapolis, Kansas City, Milwaukee and St. Louis.   The region’s outlier for rent growth is Minneapolis-St. Paul, where pricing is up somewhat less at 6.6 percent. That Twin Cities apartment rent growth rate actually is the smallest seen in any of the country’s 50 largest markets. More modest rent growth is occurring despite the fact that there’s limited vacancy in the existing stock and that ongoing construction isn’t over the top.

 

https://www.creconsult.net/market-trends/chicago-holds-the-top-spot-for-midwest-rent-growth/