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Financing Climate Tightens Around Apartment Firms

WASHINGTON, DC-Demand is up, but the credit crunch continues to send sales and debt, and equity financing volume plummeting.

By Sule Aygoren Carranza | Updated on May 16, 2008

WASHINGTON, DC—The credit crunch is certainly impacting the apartment market, pushing sales volume down significantly and restricting firms’ access to debt and equity capital. On the plus side, there continues to be strong demand for units. Those are the findings of the National Multi Housing Council’s most recent Quarterly Survey of Apartment Market Conditions.

The organization polled 87 chief executive officers and other senior executives of apartment-related firms across the country between April 28 and May 5. According to the indices utilized by the organization, a score above 50 indicates that for the most part, conditions are improving. A reading of less than 50 indicates conditions are worsening.

Respondents reported higher occupancy and/or rental rates than the prior three months, sending the market tightness index to 44 from 33 in January. NMHC notes that the improvement is also a sign that the shadow market of rental units isn’t seriously impacting traditional apartments.

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