LOS ANGELES-Multifamily has been the strongest commercial real estate sector for a couple of years now, and that is not expected to change any time soon. The RealShare/Jones Lang LaSalle Apartments Outlook 2012 survey, conducted at the recent RealShare Apartments conference here, found that many are still bullish on the sector.
Scroll all the way down the page to download the full survey.
Michael Berman, chief executive officer of CW Capital, said that the sector's success is ruled by its strong fundamentals. “I think it’s clear that with home ownership coming down, the rental space is probably the single strongest asset class in the U.S. right now,” said Berman, who is in the video below.
Rents are expected to grow in the sector, according to those surveyed. Most respondents, 41%, expected rents to increase by 1% to 3%. Just under that, 37%, see rents shooting up from 3% to 5%. Only 12% said rents would climb by more than 5%.
"We’ve had some instability in the market, but I think it’s going to change a little bit, then catch up maybe 3% to 5% over the next year and a half,” said Diane Miramontes, executive vice president, Jones Lang LaSalle’s Capital Markets, who is featured in a video below.
Steven Ludwig of Coastline Capital Partners says as an investor he expects 2% to 3% rental growth, but in some markets that number can go a lot higher. "We are noticing on the management side in really well located properties here in Southern California rents are pushing anywhere between 3% 10%, which we’re really excited about,” said Ludwig, who is in the below video.
Other findings of the survey:
- Los Angeles, San Francisco, Dallas, San Diego and Phoenix are the top markets for buyers
- Las Vegas, Los Angeles, Washington, D.C., Atlanta, Houston and Phoenix are the top sellers' markets.
- Private investors are the biggest competition for deals, at 46% of all buyers.
- Most respondents, 67%, are interested in value-added properties.
- Most surveyed think that cap rates will remain where they area.
- A majority think that the construction pipeline has opened up again.
Click the "download now" button to view the full survey.
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