Today I attended an event in Boston hosted by CoStar, titled: Multi-Family State of The Market. The two panelist included Mark Hickey and Lee G. Everett, both of whom are seasoned experts in the Real Estate and analytics fields. Mark is a real estate economist with the CoStar Group, the leading provider of data and analytics to the commercial real estate industry. Lee is a managing consultant at CoStar Portfolio Strategy, where he focuses on client advisory work as a thought leader on the multi-family sector.
The discussion included data supported analysis about the multi-family sector, both nationally and regionally. The takeaway included a broader discussion about the history of the sector, its growth since 2010, and the forecast ahead. The presentation included impressive graphs and charts providing a thorough analysis which was displayed electronically via the big screens. The data was very convincing; it clearly showed how the multi-family markets nationwide have changed since the 2015’ peak.
In particular, it revealed the impact of new deliveries on both class A & B inventory and further demonstrated how the increase in concessions and vacancies occurred as a result. Also, the discussion included the ongoing impact due to the lack of available construction trades and its impact on the timely delivery of apartments into the market. The data was clear, nationally and in Boston rental concessions are common especially in the Class A & B products. Due to the delays in deliveries, we will never know how the absorption rates will likely have been impacted. Some might suggest that if the deliveries occurred according to schedule, then the absorption rates would have been substantially challenged.
In summary, the presentation and analysis was thorough and thought-provoking. Lee noted: “Nationally rent growth will continue to be muted due to both demand and supply-side factors. Moreover, as we move forward in the coming years, demand-side factors will favor product aimed at both seniors and aging Millennials.”