May 14, 2022 Weekly Investor Update

Life Bridge Capital Weekly Investor Update

May 14, 2022

The Latest in Commercial Real Estate (CRE), Economy & Markets





Mortgage Rate (30-Year Fixed): 5.30% (as of 5/12)


Existing Home Sales: -2.7% (March 2022)

New Residential Sales: -8.6% (March 2022)

Median Sales Price for New Houses Sold: $436,700 (March 2022)

Construction Spending: +0.5% MoM (March 2022)

New Residential Housing Starts: 1.79 million (March 2022)

New Residential Housing Completion: 1.3 million (March 2022)


Homeownership Rate: +65.4% (1Q22)

Rental Vacancy Rate: +5.8% (1Q22)


Sources: NAR, BLS, Federal Reserve Bank, MBA

Note: Rates listed are estimates and may not reflect actual rates depending on term, sponsor location, and other factors involved.




10. Apartment rental demand to remain strong

Marcus & Millichap CEO Hessam Nadji announced during his interview with Fox Business that apartment rent growth will be sustained in the coming months as the commercial real estate industry has been gaining more investments. Despite the rise in interest rates and an acceleration in home prices in Phoenix, Austin and Atlanta, Nadji believes that the 18% YoY growth of apartment demand in Q122 is a solid indicator of a more stable multifamily market this year.


9. Residential building construction jobs rise due to growth in multifamily property demand

The Bureau of Labor Statistics (BLS) April 2022 employment data revealed a steep increase in residential building construction jobs by 0.4% MoM. The BLS also highlights the rise in multifamily jobs by 6.4% in March 2022, higher than the February 2020 values before the pandemic started. On the other hand, due to a month delay in release, jobs data on apartment operations reflects March 2022 values, indicating 2.1% rise MoM. Total employment for multifamily leasing was up 0.2% MoM, and higher by 0.5% when compared to February 2020 values.


8. High rent-to-income ratio will soon stabilize

Moody’s Analytics believes that the current high rent-to-income ratio brought about by the huge surge in rent growth in major metro areas will soon stabilize as inventory is likely to pick up very soon. According to the organization’s senior economist Lu Chen, the sharp increase will not be sustained as supply chain problems will be resolved and high inventory in metros will tame inflationary pressures. In addition, former Freddie Mac CEO David Brickman opined in a separate interview that the tight market will soon find support from the billions of dollars of underplayed capital intended for multifamily properties.


7. Dallas-Fort Worth top metro for apartment sales

Dallas-Fort Worth leads CBRE’s top metros for multifamily investment. The real estate firm cited the metro area’s sound fundamentals that attracted $29.15 billion worth of transactions, representing 7.8% of all apartment sales in the country last April. The strong demand has fueled sharp increase in rents with 18.6% rise in Dallas and 16.4% in Fort Worth. Also in the top five are Atlanta, New York Metro, Greater Los Angeles and Houston.


6. Multifamily rents up 14.3%, setting all-time record

The average U.S. asking rent for multifamily properties increased $15 in April, reaching an all-time record high of $1,659. The YoY growth is at 14.3% with no signs of slowing down in the coming months, according to the latest Yardi Matrix Multifamily Report. Rent growth was also observed in all 30 surveyed metros over the past month, quarter and year with Florida, the Southwest, Boston, New York, San Jose and Philadelphia all leading the pack. On the other hand, the lowest rise in rents were recorded in Washington, D.C., the Twin Cities and Miami.


5. Apartment spaces have gone smaller but not in Midwest cities 

Research by RentCafe revealed that the total apartment size in the country has shrunk over the past 10 years, including the total living space per renter. The group discovered that average apartment size has gotten smaller from 943 sq ft to only 913 sq ft with at least 2 renters per unit. This means that one’s personal space is equivalent to 540 sq ft only, or similar to a large master bedroom. However, ample living space in apartment units can be found in the Midwest cities with an average private space per renter larger than 700 sq ft. Topping the list is Independence, MO, followed by Olathe, KS and Dayton, OH.


4. Multifamily sector investments reach $63 billion in Q122

CBRE reports that total investments in the multifamily sector rose by 56% YoY to $63 billion in Q122, the strongest Q1 to date. The multifamily market contributed a total of 37% to total commercial real estate investments in the quarter. Office and industrial investments accounted for 21% and 20%, respectively. This brings the total absorption of multifamily properties to 695,100 units in Q122, higher by 12% QoQ. CBRE cites strong migration trends, household formation, and better job and wage growth as strong influencers of apartment demand today.


3. Idaho leads highest equity-rich properties

Recent research from ATTOM revealed that homeowners are now 45% more equity-rich due to the increase in home prices over the past months. The group also announced that Idaho has the highest level of equity-rich properties with 68.8%, followed by Vermont (68%), Utah (63.6%) and Washington (60.9%). A homeowner qualifies as equity-rich when at least he owes less than 50% of the house’s current estimated market value.


2. Five top Sunbelt multifamily markets named

Private equity real estate fund management firm Origin Investments ranked the top areas for multifamily rent growth and investment and revealed that Sunbelt cities occupied the top five spots. Phoenix is a top investment choice and was recognized for its affordability and business opportunities in semiconductor development. Other Sunbelt cities that made the list include Tucson, Las Vegas, Austin and Nashville. In particular, Austin was cited for its tech industry, which has attracted many professionals to migrate there.


1. Multifamily sector continues lead in global commercial real estate investment volume

The multifamily sector sustains its lead for the sixth straight quarter in global commercial real estate (CRE) investment volume with a total of $76 billion in Q122, up by 18% YoY, according to CBRE. In the US, it accounted for $58 billion or 40% of total CRE Q122 investments. The largest multifamily investment volumes in the quarter were recorded in Dallas, New York, and Los Angeles. On a global scale, the office sector came in second with $82 billion total investment volume, followed by the industrial & logistics sector with $61 billion.



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