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Study Predicts Rebound in Multifamily Demand

NEW YORK-A study by Clarion Partners, a leading national real estate investment advisory firm, shows apartment occupancies on the upswing, with returns to investors of about 10%. An increase in new multifamily construction is also expected this decade.

By Diana M. Rodriguez | Updated on March 10, 2003

NEW YORK CITY-With the multifamily sector struggling nationwide due to the faltering economy, a new study by Clarion Partners has spread a ray of hope, estimating a rebound in rents and occupancy may be on the horizon. According to the study, returns to investors are slated to hit the nine to 11% range by the end of the decade.

Clarion, a real estate investment advisory firm, suggests in its US Apartment Market 2000-2010 report that 12 million new households will be formed within the next seven years, creating the need for 190,000 new apartments by the end of the decade.

“A difficult economy and low job growth have hit new apartment absorption particularly hard,” says Dougal M. Casey, author of the study and head of investment strategy & research at Clarion Partners. “As economic conditions start to improve, we expect absorption rates to return to levels closer to historic norms.”

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