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Class B Multifamily Could Be Affected by Attacks

WASHINGTON, DC-Delta Associates and Transwestern Commercial Services report that this particular submarket of apartment housing tends to depend on renters in those positions that may have been eliminated in the aftermath of the attacks, like the lodging and tourism industry. The firms see flat rent growth and a slight increase in vacancy rates going forward.

By Marlon Millner | Updated on October 24, 2001

WASHINGTON, DC-Both nationwide and locally, multifamily housing has been seen as a safe haven for real estate investing. And generally, real estate experts have said that the District’s real estate market remains healthy and protected from the fallout of the September 11 terrorist attacks. However, a recent report by Transwestern Commercial Services and its research subsidiary, Delta Associates of Alexandria VA, indicates the class B multifamily market in Washington may taper off slightly.

In a research report, Delta Associates said that before the terrorist attacks, class B apartment real estate was expected to maintain low vacancy rates and have rent increases at or near 5% each year for the next two years. However, the report notes that tenants in this submarket tend to be the very people that had jobs in tourism, hospitality and transportation that were affected or eliminated after the attacks. Thousands of people in the District have filed for unemployment from positions they formerly held at one of the more than 100 hotels in the city, or at Ronald Reagan National Airport just across the Potomac River in Alexandria. Since folks in these types of positions tend to occupy class B apartments, the firms said, they both expected a flattening of rents over the next six months. The report expected vacancy rates to inch up further.

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