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Tenant Affordability Hits a Ceiling

The economic outlook for 2018 remains strong, but with rents continuing to increase, we may be hitting a ceiling in certain product types on tenant affordability.

By Kelsi Maree Borland | Updated on January 04, 2018

Jeff Rinkov Jeff Rinkov is the CEO of Lee & Associates.

This year may see flattening rents—or at least tenant affordability issues—in several asset classes. Significant rent growth in nearly all asset classes has been a theme of the last several years, but the extreme pricing may be hitting a ceiling for some tenants, according to Jeff Rinkov, CEO and president of Lee & Associates. While his outlook remains positive this year and for the foreseeable future, he says that plateauing rents may be around the corner.

“We have seen really substantial rent growth, and I think that we are going to reach a ceiling in certain product types on tenant affordability,” Rinkov tells GlobeSt.com. “In the next 18 to 36 months, rent growth may be more subdued as a result.”

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