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Apartments: "Consensus has a high price"

By Anonymous

A few random thoughts from the apartment conference ..

? Rent growth is mostly from reduction in concessions. Not as much top line growth.

? Austin: rents are up 13%, but there is huge building boom (seems like every builder is planning or already started a project in Austin, so people are talking about the coming flood of supply)

? CAP rates look a little like a bubble ... people are buying the low 5s in some areas. There is plenty of capital flowing into multi-family.

? Greg Mutz (CEO AMLI Residential Properties) joked "Consensus has a high price"!

? Investment money is flowing into the sector.

? On submarkets: Las Vegas, Phoenix, Inland Empire, parts of Florida, Altanta were all named as disappointing.

? Everyone likes Boston, Seattle, Austin (although afraid of the coming supply) LA, Orange County ...

? Almost all areas are showing improvement.

? Several people have noted that turnover is at record lows (people aren't moving for jobs). Some people are concerned that as the economy improves turnover will increase again - and that eventually some people will choose to own.

? 2010 was beyond all expectations, and that is part of the reason for the optimism. The low level of completions in 2011 suggests the markets will be even tighter.

? Walt Smith, CEO Riverstone Residential (manages 162,000 units) said it is "Pedal to the metal" on rents.

For more, please see the previous post.

Full post as published by Calculated Risk on January 18, 2011 (boomark / email).