More positive news for the apartment sector, as revenue growth continues. We are continuing to see more strong news from the apartment sector of commercial real estate, as national occupancy and revenue increased significantly.
This article was ori
ginally published in Units magazine and re-posted on Joseph Bernard Investment Real Estate’s website.
The U.S. Apartment sector again posted robust revenue growth in Q3 2011, according to MPF Research, a market intelligence division of RealPage. National occupancy climbed 0.6 percentage points during the past three months, and effective rents jumped 1.6 percent.
“Top-line revenue growth numbers for apartments remain terrific, despite the struggles seen in the general economy,” said Greg Willett, MPF Research Vice President, in a press release.
Occupancy reached 94.8 percent as of the third quarter, up from 93.8 percent a year ago and from 91.8 percent when the market’s performance bottomed in late 2009. “While occupancy isn’t yet at an all-time high, the rate has moved a little ahead of the average level recorded over the course of the past decade or so,” Willett said. “The unusually small number of households leaving rental units to buy homes is really the key influence behind today’s strong apartment occupancy performance. Furthermore, it just doesn’t take much new demand to surpass the small block of new supply that’s coming online right now.”
Rents in U.S. apartments grew 4.2 percent between Q3 2010 and Q3 2011. The total increase seen since pricing bottomed in late 2009 is right at 7 percent.
“All the bad news that’s out there about the state of the overall economy is making apartment owners and managers a little nervous,” Willett said. “To date, however, operators clearly aren’t letting some uncertainty about the future play much of a role when setting current rents.”
Excerpt from the article “Revenue Growth Continues in Q3” from the October 2011 Units Magazine. Click here to be redirected to the National Apartment Association website.