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In a recent white paper, CBRE asked: Is the bloom off the multi-housing rose?
Since the recession, multi-housing has seemingly been the only option for investors, and the increasing number of permits issued has led to concerns that the market may deliver more space than we’ve seen in the past.
CBRE’s Pipeline showed 60 percent of the permits issued pre-recession were for condominiums. Since 2012, 75 percent of units underway have been apartment rentals.
Considering rents and current returns on cost, CBRE sees an impetus for developers to continue building multifamily assets; however, many factors will likely prevent excessive development.