Regardless of the compelling growth in apartment rents, the current landscape for multifamily development does present challenges.
Nonetheless, developers and investors see potential in the recession-resistant multifamily sector, although not every opportunity pans out.
“We have seen major cities greenlight multifamily development, but because of the rising costs of labor and construction, coupled with long entitlement processes, the only projects that pencil out are the ones that command $3, $4 and even $5 per square foot in rent. Those are not rents that moderate-income renters can afford, so we are seeing a lot of money pouring into value-add buildings to bridge the gap,” says Jonathan Lee, principal and managing director of Los Angeles-based George Smith Partners Inc., a real estate capital advisory firm.
Read the full article: Steadfast’s New REIT Plans to Focus on Development and Renovation in a Tough Acquisition Environment (National Real Estate Investor)
