multifamily vacancy rates projected to rise...with a current vacancy rate of 2.2%, new york city is...

MULTIFAMILY VACANCY RATES PROJECTED TO RISE According to Oxford Economics and CoStar Analytics, the severe downside multifamily market forecast due to the COVID-19 crisis projects an increase in multifamily vacancy rates across the nation but varies among metros. With a current vacancy rate of 2.2%, New York City is projected to experience the smallest increase, growing only 180 basis points by the end of 2021. At the opposite end of the spectrum, Austin’s vacancy rate is expected grow 520 basis point, increasing from 8.1% to 13.3% by the end of 2021. Washington, D.C. ranks in the middle of the pack. The apartment sector entered April with a healthy vacancy rate of 6.3%, considering the sheer amount of new apartment openings last year. Over the next two years, D.C.’s vacancy rate is expected to climb to nearly 10%, resulting in a total expansion of 360 basis points. Cities that rank stronger include Philadelphia, Norfolk, Baltimore, Los Angeles, and New York City, which all have less exposure to high-risk job sectors like leisure and hospitality, as well as having diverse employments sectors, including government, education and health services, and professional and business services. With more than 28,000 units currently under construction, Dallas-Fort Worth is expected to experience a 4.5 percentage point vacancy rate increase from 8.6% to 13.1% by the end of 2021. Austin, Denver, and Charlotte are seeing similar inventory expansions, pushing the elevated vacancy rates higher. Austin is projected to add over 13,000 new units by the end of 2021, while Denver and Charlotte are expected to add 11,000 and 8,800 units, respectively. These are uncertain times, and these projections offer just one glimpse at the expected outcome for the multifamily sector. Vacancies are going to go up in every major U.S. metro; the question moving forward will focus on how severe that increase is and where it will be felt the hardest. Current & Peak Forecasted Vacancy Rates SNAPSHOT RESEARCH & ANALYSIS For more information or to inquire about Greysteel, please contact one of our Transaction Professionals Ofﬁces Nationwide www.greysteel.com Greysteel is a leading transactional commercial property advisor for private, middle-market, and institutional investors. Our platform optimizes options for our clients by providing end-to-end investment services, from sales and ﬁnancing to research and investment planning. Strategically located across the United States, Greysteel has established broad market coverage from coast to coast. All information is obtained from sources recognized as reliable but Greysteel makes no guarantees as to the accuracy thereof. Sources: Greysteel Research; CoStar Analytics; Oxford Economics © 2020 Greysteel 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% New York Los Angeles Norfolk, VA Philadelphia Washington, D.C. Baltimore Charlotte Denver Austin, TX Dallas- Fort Worth San Antonio, TX Oklahoma City Current Vacancy Rate Peak Vacancy Rate (2020/2021)

Upload: others

Post on 20-Aug-2020

2 views

Category:

Documents

0 download

Report

Download

Embed Size (px):

TRANSCRIPT

MULTIFAMILY VACANCY RATES PROJECTED TO RISE

According to Oxford Economics and CoStar Analytics, the severe downside multifamily market forecast due to the COVID-19 crisis projects an increase in multifamily vacancy rates across the nation but varies among metros.

With a current vacancy rate of 2.2%, New York City is projected to experience the smallest increase, growing only 180 basis points by the end of 2021. At the opposite end of the spectrum, Austin’s vacancy rate is expected grow 520 basis point, increasing from 8.1% to 13.3% by the end of 2021. Washington, D.C. ranks in the middle of the pack. The apartment sector entered April with a healthy vacancy rate of 6.3%, considering the sheer amount of new apartment openings last year. Over the next two years, D.C.’s vacancy rate is expected to climb to nearly 10%, resulting in a total expansion of 360 basis points.

Cities that rank stronger include Philadelphia, Norfolk, Baltimore, Los Angeles, and New York City, which all have less exposure to high-risk job sectors like leisure and hospitality, as well as having diverse employments sectors, including government, education and health services, and professional and business services.

With more than 28,000 units currently under construction, Dallas-Fort Worth is expected to experience a 4.5 percentage point vacancy rate increase from 8.6% to 13.1% by the end of 2021. Austin, Denver, and Charlotte are seeing similar inventory expansions, pushing the elevated vacancy rates higher. Austin is projected to add over 13,000 new units by the end of 2021, while Denver and Charlotte are expected to add 11,000 and 8,800 units, respectively.

These are uncertain times, and these projections offer just one glimpse at the expected outcome for the multifamily sector. Vacancies are going to go up in every major U.S. metro; the question moving forward will focus on how severe that increase is and where it will be felt the hardest.

Current & Peak Forecasted Vacancy Rates

SNAPSHOTRESEARCH & ANALYSIS

For more information or to inquire about Greysteel, please contact one of our Transaction Professionals

Offices Nationwide www.greysteel.com

Greysteel is a leading transactional commercial property advisor for private, middle-market, and institutional investors. Our platform optimizes options for our clients by providing end-to-end investment services, from sales and financing to research and investment planning. Strategically located across the United States, Greysteel has established broad market coverage from coast to coast. All information is obtained from sources recognized as reliable but Greysteel makes no guarantees as to the accuracy thereof.

Sources: Greysteel Research; CoStar Analytics; Oxford Economics

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

New York Los Angeles Norfolk, VA Philadelphia Washington,D.C.

Baltimore Charlotte Denver Austin, TX Dallas-Fort Worth