Apartment Leasing Season Is Already Breaking Records For Morgan Properties

“I anticipate that demand will continue through the end of the year,” Sean Organ of Morgan Properties tells GlobeSt.com about the current leasing season. Usually, the season runs from April through September, but it has started early, and Organ expects that it will run late.

On student housing properties, Organ already has a waitlist and 100% pre-leasing. “Normally we don’t get to that point until late June,” he says, noting that it is one indication of strong demand, but conventional properties are seeing similarly strong demand. In the Mid-Atlantic region where Organ operates, high occupancy rates have helped to drive strong rent growth. We are seeing very little push-back despite historically high renewals and lease trade-outs for new leases.”

While demand is high, supply is not, and Organ admits that will be a challenge later in the year. “Looking across the entire nation, we have had a significant slowdown in new deliveries,” he says. “As a result of that, the push for new leasing is just tremendous. There has been a lot of pent-up demand, but unfortunately, there are not a lot of options for people to move to due to the slowdown of new deliveries.” Now that inflation has increased above 8%, Organ expects that the dearth of supply and limited new construction will continue to fuel a supply-demand imbalance.

In Organ’s portfolio specifically, the team plans ahead to have limited supply in the fourth quarter to offset the decreasing demand an stabilize performance. Now, that means even fewer available apartments. “We are not going to have nearly enough supply because of our lease expiration management,” he says. “We consolidate our leases through a revenue management software, and because of that, we are going to have fewer expirations in the fourth quarter. We have set ourselves up for a strong fourth quarter for the last several years, and we expect that to continue this year.”

Although rental rates have increased, Organ says they haven’t seen much push-back from tenants. “I would naturally think that coming out of the pandemic, most residents are sensitive to price hikes, and that is actually not the case,” he explains. “People have been able to save and the stimulus has helped people.”