Theoretically, Class A apartments – upscale, professionally managed units – should bring in a lot more rent than less fancy Class B or Class C apartments. In many cases that is true. But supply can change the dynamics, according to a new RealPage analysis.
Nationwide, there is a 28% rent premium for Class A units, which in May had an average monthly rent of $2,298, compared to the Class B average of $1,795. That premium paled in comparison to Newark, where Class A rents of $4,000 brought in about 50% more than Class B, while in West Palm Beach, St. Louis and Cleveland premiums were 45% higher.
In some markets, however, the premium was much lower than the national average. In Portland, it was under 13% and in Orlando under 15%. In other major markets like Las Vegas, Anaheim, Denver, Jacksonville, Riverside and San Diego the premium was less than 20%.
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