categories
Recent Comments
- Originations: Are Realtors Overpaid? | The Basis Point on Housing Bubble Talk Returns
- 12.61% Dividend Payer Apollo Residential Mortgage Returned 56% In 2012, Uptrend Is Still Strong on U.S. Housing And Residential Mortgage Finance 2013 Outlook: The Nascent Recovery Is Likely To Continue
- Mortgage application fraud is on the rise on U.S. Housing And Residential Mortgage Finance 2013 Outlook: The Nascent Recovery Is Likely To Continue
- Real Estate Investing News This Week 2013-04-13 on A Housing Recovery Is Buttressing U.S. Homebuilders’ Credit Quality
- Tuesday Morning Links | timiacono.com on As The Market Recovers, U.S. Single-Family Housing Activity Builds
tags
10-City Composite 20-City Composite Atlanta Boston Chicago condo prices Dallas David Blitzer Detroit Economy and Real Estate Existing Home Sales home prices Las Vegas latest results Los Angeles Miami mortgages MSAs New York Phoenix residential real estate S&P/Case-Shiller S&P/Case-Shiller Home Price Indices report S&P/Experian Consumer Credit Default Indices San Francisco US Housing Prices
WP Cumulus Flash tag cloud by Roy Tanck requires Flash Player 9 or better.
The posts on this blog are opinions, not advice.
Please read our disclaimers for Ratings Services, Indices, Equity Research, Securities Evaluations and Risk Solutions
Please read our disclaimers for Ratings Services, Indices, Equity Research, Securities Evaluations and Risk Solutions
Strong Rental Demand Continues To Bode Well For U.S. Multifamily REITs
It’s hard to imagine how operating conditions could have been better for U.S. multifamily REITs last year. As the housing slump stymied new single-family development due to weak demand, multifamily properties found themselves well occupied, which helped drive solid rent growth. They didn’t just stumble into the sweet spot last year, however. Multifamily REITs began their recovery in early 2010 as rent and net operating income (NOI) began to improve. They turned positive in the second half of 2010 and then blossomed throughout 2011—momentum that we expect to continue this year as well.
In addition to performing well as a rated sector in 2011, multifamily REITs outperformed their local and national markets. This strong occupancy, along with limited new supply, helped NOI recover quickly. The multifamily REITs we rate maintained a relatively flat but strong average occupancy rate of 95.5%, but increased their average rents by 4.1% and NOI by 6.7%. Comparatively, CBRE Econometric Advisors (CBRE) reports that the national vacancy rate dipped 70 basis points to 5.3% while effective rents grew 4.9%. We believe that as the economy slowly strengthens and new supply remains in check (for now), operators can achieve similar growth in 2012.
S&P Ratings Services recently published a report (read here) highlighting our outlook for the sector. The overview of the report is shown below: