Economic Gains Attract Tenants and Investors to Atlanta

Metro Atlanta apartment operations have made substantial strides since the downturn and show no signs of slowing. Employment growth in the region exceeded the national average for four years and is expected to surpass pre-recession levels this year. Broad-based job creation is attracting more people to Atlanta, fueling demand for housing. Over the past year, net migration surged 42 percent as 32,800 individuals moved to the region. Motivated, multifamily developers ramped up construction in 2013, following three years of subdued activity. Despite a substantial increase in supply, pent-up demand resulted in vacancy tumbling to 6 percent in the third quarter of this year, the lowest rate since 2007. This year, new supply will fall slightly below last year’s level and is concentrated in highly desirable areas of Buckhead, Midtown and downtown Atlanta. A bulk of the total will come online in the fourth quarter, though elevated tenant demand will sustain tight vacancy. Both newly built apartments and strong demand for rentals will put upward pressure on average rents, marking a fifth year of growth.

Surging Economy Likely to Carry into 2015; Positive Prospects for Commercial Real Estate

The U.S. economy is expanding at the fastest pace since 2003, providing ample evidence that GDP growth will be on solid footing as 2015 begins. Equity markets are hovering near all-time highs, unemployment is below 6 percent and falling, and job gains have been impressive — all reflective of strong economic momentum. Consumers echoed the good feelings as confidence reached an eight-year high in December. In addition, with foreclosures from the housing crisis beginning to fall off credit reports, home values have begun a solid recovery. This convergence of positive trends will cause the Federal Reserve to deeply consider its interest rate strategies. The headwinds still confronting growth include the sizable divergence between the health of the U.S. economy and that of many of its trading partners, and risks spawned by the rapid plunge in oil prices. Nonetheless, GDP growth should exceed 3 percent in 2015 and could surprise to the upside, depending on Fed policies in the coming months.

Low returns on stocks are the new normal

My, what short memories investors have.

As the Dow Jones Industrial Average races toward 17,000, on its way, no doubt, to 36,000, it seems that everyone and their broker has either forgotten, or never knew, about one of the simplest and most devastating pieces of stock-market analysis ever written. It was written just 12 years ago, by Rob Arnott, then at First Quadrant and now at Research Affiliates, and the late, great investment legend Peter Bernstein.

PNC bullish on future of Atlanta’s economy

PNC Financial Services Group, Inc. expects Atlanta’s economy to be a “a top performer in 2014 and 2015.”

According to the Pittsburgh-based bank’s Atlanta Market Outlook for the second quarter of 2014, the South is leading the nation in terms of economic growth, which bodes well for the region’s transportation and logistics industries. Leisure and hospitality will be sustained by increased demand for convention space and tourism as the U.S. economy continues to expand. Also, there will not be any major federal tax increases or spending cuts as there were in 2013, which is a positive for economic growth this year.

Survey Shows Industry Insiders Are Bullish On Multifamily Property Market

The apartment sector today is in a good place—a very good place—and the future looks just as good, according to a survey conducted by National Real Estate Investor.

“We’re not in a boom market,” says Nick Ryan, CEO of The Marquette Companies, a Naperville, Ill.–based real estate firm with a portfolio of 11,000 apartment units. “We’re in a strong, healthy market that’s going to last for a long period of time.”

The survey, which solicited opinions from 1,001 completed surveys, including 947 respondents involved in the multifamily sector from across the nation, uncovered high levels of optimism. From occupancy and rental rate growth to development levels and financing availability, respondents report favorable conditions for the apartment sector.

MMI: Value Add Apts. Will Draw More Interest

CALABASAS, CA-Domestic and cross-border investors alike will fuel capital allocations to US real estate assets throughout 2014, writes Marcus & Millichap’s Hessam Nadji in the firm’s National Apartment Report

Hotel REIT CEOs Expect Low Supply Healthy Demand in 2014

The hotel and lodging sector is benefitting from a combination of low supply, healthy demand, and strong corporate balance sheets, according to panelists at aREITWorld 2013 forum.

Apartment Market Dynamics Look Strong for Next Two Years

Apartment markets continued to improve across all areas of the country for the seventh quarter in a row, though the pace of improvement moderated, according to the National Multi Housing Council’s (NMHC) Quarterly Survey of Apartment Market Conditions. Still, the NMHC said the outlook is for continued strength in the multifamily sector for the next two years.

No Bubble In Multifamily Values, According to Freddie Mac

Renter household formation has outpaced owner household growth during the past few years, spurring a huge increase in multifamily property sales and new construction.

Despite the boom in multifamily sales and development, Freddie Mac’s latest Economic and Housing Market Outlook found that residential property values “remain consistent with fundamental economic forces in the housing market,” and that the rate of appreciation for multifamily property values moderated over the past year.