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Investor Demand for Apartments on the Rise

Nine out of 10 investors plan to increase their allocations to the sector next year, and most are after opportunistic plays.

By Sule Aygoren Carranza | Updated on October 13, 2009

[IMGCAP(1)]CHICAGO-In a survey of more than 200 major owners, investors and developers within the multifamily commercial real estate market, nine in 10 plan to increase their investment allocation into apartment product next year. Last year, only 68% of those polled expected to do so, according to the forecast survey, conducted annually by Jones Lang LaSalle.

The leap in the amount of players looking to up their allocations to the sector signals that investor sentiment is increasingly shifting, relates Jubeen Vaghefi, managing director and leader of Jones Lang LaSalle’s multifamily capital markets practice. “Multifamily is a sector to watch in 2010 as investors seek strong, stable assets with growth potential,” he explains.

Of those looking to increase their multifamily activity, a slight majority–57%–intend to increase their investment to 60% next year, with opportunistic plays being the number-one preference among investors. A good 90% of survey participants said they will likely try to go down the opportunistic road in 2010, which is more than double the 44% of investors who were seeking those types of plays last year.

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