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1Q18 United States Multihousing Market Report

MAY 2018
ARA and Berkeley Point Capital present the First Quarter 2018 United States Multihousing Market Report. The statistics and outlook contained in the report illustrate current trends in the Multihousing sector.

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Executive Overview

Sales Volume Investment sales for 1Q18 increased 25.1% year-over-year to $34.8 billion with suburban value-add product seeing the bulk of recent capital flow, especially in markets such as Atlanta and Dallas. Over the past 12 months, total volume also rose to $160.1 billion for an 8.8% annual growth.
Cap Rates Strong investor demand in both major and non-major markets for multihousing product continued to drive yields down in 1Q18, declining quarter-over-quarter and year-over-year.
Rent Growth Annual effective rent growth remained steady at 2.3% nationally. Several western markets, including Sacramento, Las Vegas, Phoenix and San Diego, as well as markets throughout Florida, such as Orlando and Tampa, are experiencing above-average rental growth on the heels of strong absorption.
Supply and Demand With nearly 92,000 units delivered, 1Q18 saw the strongest delivery quarter since 2Q17. 2018 is expected to be the peak year for new supply nationally, yet high-growth markets such as Austin, Dallas, Charlotte and Nashville continue to see strong inventory growth and absorption.
International Capital International capital sources acquired $12.9 billion in U.S. multihousing over the past 12 months, with several large-scale transactions in the student housing space. New entrants and emerging buyers throughout the globe are increasingly looking at opportunities in U.S. multihousing.
Debt Markets Multihousing debt outstanding increased 2.1% annually to $1.3 trillion, with GSE debt outstanding representing 48.1% of the total market. Over $110 billion of U.S. multihousing mortgages are set to mature in 2018.

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