Developers Ramping Up Multifamily Projects
New York Times reports: With its educated workforce and being relatively untouched by the recession, the City of Boston’s economy is returning faster than in other areas. As the New York Times reported recently, these have been driving factors behind a surge in new multifamily development in and around Beantown. The demand for quality rentals in the area has risen so much, in fact, that developers are reverting planned condominium projects – which typically yield higher returns, but have been unmarketable during the downturn – into monthly and long-term rental units.
For developers, the strategy and location have combined to make financial sense. The Times indicated that analysts expect asking rents to rise 3.5% in 2011, with the potential for even higher returns in the better-off City of Boston, which ranked as the third-strongest rental market in the Institutional Property Advisors’ most recent National Apartment Index. Additionally, the index predicts that Boston’s multifamily vacancy rate will fall to just 4.5%.
Though multifamily projects have been restarting all over the country at some fortitude over the past year, the pipeline of new developments has remained severely constrained after the downturn. Real Capital Analytics managing director Dan Fasulo remarked to the Times that, “That’s almost unheard of in the post-World War II economy.” He was also not surprised to hear that given the barren playing field, “there’s a race among developers to deliver more product.”
For more on the state of the multifamily development market, please see the full article on the New York Times’ website.
View the full article on New York Times: Developers Ramping Up Multifamily Projects
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Posted by: Nina Turner