Today, a steadily recovering economy and booming Millennial market have made the multifamily housing sector highly lucrative for commercial real estate leasing. Even through the darkest days of the recession, multifamily housing remained profitable for commercial investors because people opted to rent when the single-housing market’s bubble burst. This changed the next generation’s (Millennials’) perception of buying vs. renting.
MILLENNIALS ARE FLOCKING TO MULTI-FAMILY HOMES
It’s not enough for Millennials to be constantly connected through mobile devices. Demographic studies show they want to be physically (and digitally) in the thick of things. Millennials are swarming trendy, urban multifamily housing, so they can live in neighborhoods near where they work and socialize. They value flexibility, reduced commitment, open space amenities and closeness to their peers.
“The shifting trends among Millennials have opened new opportunities in the real estate market,” said Al Goldstein, CEO of Pangea Properties. “The influx of long-term renters into the marketplace has not only resulted in increased demand, there has been an increase of competition as well.”
OPPORTUNITY FOR INVESTORS
For the multifamily housing sector, occupancy rates and rental prices are up, but due to a lack of new supply and increasing demand (via Millennials), vacancies are lower than ever. Millennials aren’t on a 5-year plan for purchasing a home. They are more content with long-term renting in multifamily homes. This forecasts a need for more units, increased rents and secure investments. This creates a prime market for investing in the development of new properties. In a National Real Estate Investor study, more than 1,000 real estate professionals, “rated multifamily as the most attractive asset class, and overwhelmingly said they believe that opportunities can be found in every market.”
Talk to our construction and development team about opportunities to grow with this dynamic sector.