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 Colleagues: Please click on the link near the bottom of this page for ARA's First Quarter 2010 U.S. Market Update. I remember touring apartment properties in Denver in December, 1991. I asked managers about the amount of concessions they were giving. Most answered: "We stopped giving concessions a few months ago." With properties still selling substantially below replacement cost and no new supply on the horizon, Denver's apartment recovery had started. And some very good U.S. apartment investment years were just ahead. Similar to that period, effective rents have now begun to rise in 1/3 of ARA's 29 surveyed markets (they were unchanged or lower in all markets last quarter). And finally occupancies are stabilizing, unchanged or rising in 26 of 29 markets. And what's the biggest difference from 19 years ago? It is the amount of capital chasing so few offerings today, in turn, pushing cap rates down almost across the board. Investors today recognize that apartments are integral to their real estate strategy. It's just more crowded at the table and will continue to get more crowded as institutions gear up to return to the acquisition market later this year. Remember, recoveries don't happen like a gavel to a table. It’s a slow crawl but this one is continuing on a positive course. With the availability of low debt rates today, the time is right to join the crawl. Bottoms never announce themselves. Please CLICK HERE to access ARA's First Quarter 2010 U.S. Market update.
My Best, p.s. As always, drop me a line with any feedback you have. |
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