A big question on many apartment investors’ minds for 2017: is Portland overbuilt for apartments? Based on a quick look, it appears the answer is “NO”. According to the Barry Apartment Construction website:
“With recent increases in the pace of construction, we expect the overall vacancy rates to creep up. However, we do not expect vacancy rates to approach 5% for at least 12-18 months and possibly longer…The current levels of construction are meeting the new demand and should start bringing the vacancy rates to levels more in balance.”
The Barry Apartment report indicates there will be approximately 12,000-16,000 new units to become available.
A quick look reveals the existing construction as of January, 2017 centers around the inner core and I-5 corridor:
Conversely, here is the map of the sold transaction locations of existing apartments that sold in Portland in 2016:
What do the two maps really mean? There may not be a direct correlation, but I think it means there are two separate apartment markets in Portland right now- existing properties that sell in the suburbs, and new developments in the core. Both markets are strong, with sales numbers from 2015 and 2016 reaching record highs. To me, that suggests confirmation of the Barry Apartment Construction Report that we are not overbuilt.
For more information on the Barry Apartment Construction Report, email Patrick Barry at pb@barryapartmentreport.com.
