Despite higher construction costs and the paucity of premium sites in urban cores, the multifamily market-notably the market-rate and luxury rental sectors-remains strong. More than 318,000 units are likely to be delivered nationally this year, says market analyst firm Newmark Knight Frank. "There is no loss of demand," says James Gray, Senior Principal, Stantec. "The country is under-housed," adds Megan Dimmer, CEO, Humphreys & Partners Architects. In 2019, the occupancy rate of U.S. apartments stands at 95%, with rents rising 3.5% YOY, she says. Limited availability of good sites where demand is greatest could slow the market a bit in 2020. "A lot of product in this cycle has been infill." Gray says. There are only so many of those sites to be had, and "it is starting to get to the point where projects are hard to pencil in the urban core," he says.
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