HOUSTON—Due to Harvey, the multifamily market became the unwitting recipient of single-family residents seeking shelter last year. This closed the year with lower vacancy than was originally forecast. The vacancy rate contracted some 500 basis points below the long-term average of 8%, according to a report by Marcus & Millichap.
Houston was in the middle of a construction boom before the flooding from Harvey began and nearly 25,000 apartments were slated for delivery in 2017. Approximately 16,200 units opened in the first nine months of 2017, but completions tapered in the final months of the year, GlobeSt.com learns.
Is the outlook for this year expected to remain stable or will there be more unforeseen obstacles? In this exclusive, David Wylie, vice chairman, ARA Newmark, recently discussed the trends and submarkets to watch, investor evolution and perhaps some surprises in store for the multifamily market in 2018.
GlobeSt.com: What market/debt market shifts should investors watch in 2018?
Wylie: Houston will have a great deal of product: expect high transaction volume and lots of opportunities. Expect more institutions looking, bidding and winning in Houston in 2018. We might see construction financing return late in the year as well.
GlobeSt.com: What will surprise people this year and why?
Wylie: Unlike other areas, developers are buying properties, Hanover, Alliance, Morgan, for example, because the costs are so high to build and they love the story of buying. Also, it may surprise some as to how quickly rents grow in 2018 because of low supply and job growth.
GlobeSt.com: How will the region's investor mix evolve in 2018?
Wylie: Institutions will be back, underwriting aggressively and winning, and private buyers will lose market share.
GlobeSt.com: Which submarkets and dark horses are ones to watch?
Wylie: All eyes are on West Houston, Katy and the Energy Corridor as job growth returns.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
