Just saw this on twittter. Can anyone share the report?
Greenstreet's opinion on the best and worst apartment markets for go-forward risk-adjusted returns
Best: DC, Boston; Seattle, LA/OC, SF
Worst: Orlando, Phoenix, Austin, Vegas, Denver, Inland Empire
This analysis takes into account: supply, demand, pricing.
Someone is following Matty G on twitter ;)
Curious about this - I haven't been closely following Sunbelt market trends over the past year but when my firm ran some research last year most of those "Worst" markets were severely undersupplied with a pipeline that wasn't going to satisfy the housing requirement, while simultaneously having some of the highest rent growth in the US.
Would like to see their rationale behind deeming those characteristics the worst here, I can't imagine the pipeline has changed THAT much.
Not sharing the report but GS, and I, believe that coastal urban infill will continue to have strong demand with limited new supply. Land is finite in these markets.
while all the mid country markets will have to flatten out. Especially Phoenix. Literally every GP is piling into Phoenix, Denver, Austin and sunbelt markets.. Markets mostly surrounded by infinite land. Florida, ex-Miami, is 1 hurricane away from crashing
why the MS? The green street report has my name and firm in a big ass watermark on every page. Yeah I’m not sharing that
What is the name of the report? I have GreenStreet and am trying to find it
So basically they're naming most of the gateway markets as the best. I assume because they are high barrier to entry and there is limited land to develop. I work in one of these markets and I hope they are taking into account entitlement risk, both current and long term risks.
Working with the city on entitlements has become increasingly difficult. Rezoning, processing permits, and agreeing on a desired affordability level have been a bitch to deal with, way more than say 3-4 years ago. It seems the city is adding more unnecessary roadblocks for developers. Build starts have slowed down because of it. Local developers have been increasing their pipeline outside of the main city and are building in the suburbs.
That being said, we never worry about not being able to lease up a building. All of our recent completions have had absorption rate of over 20 units/month, which is strong in our market. Rents also rebounded from COVID quicker than in most markets. And we don't have to worry about unlimited supply, so I guess it's a trade off.
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