May 21, 2022 Weekly Investor Update

Life Bridge Capital Weekly Investor Update

May 21, 2022

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





Mortgage Rate (30-Year Fixed): 5.25% (as of 5/19)


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. Multifamily landlords offer more amenities for competitive advantage

Multifamily landlords are luring a higher number of renters by offering more amenities such as lobby bars, child rooms, and play areas, as announced by real estate executives during the Urban Land Institute’s convention this week. The panel, which includes executives from global real estate firms QuadReal and Lennar Corp., agreed that more buildings are focusing on offering child-focused amenities, especially when converting office buildings into apartments. Other features include co-working and entertainment areas, music rooms and fitness gyms.


9. More multifamily investors focus on working-class renters

Multifamily investors are looking to target more working-class renters, according to a new analysis from Yardi Matrix. This is because of the potential for rent growth for multifamily properties that have low current rents but are located in markets with above-trend rent growth, such as the Southeast and the Southwest regions. Out of the 83,000 properties that were analyzed by the group, 5.4% were sold at least three times over the last decade. 


8. Greater L.A. among the top multifamily investments in Q122

Over the past four quarters, the Greater L.A. ranked sixth in multifamily unit completions, with 11,000 new units delivered, according to CBRE. The group announced that there is “abundant demand for well-located apartment buildings in this tight rental market” where investor demand is highest in Orange County, Inland Empire and San Diego areas. New York topped the list in the CBRE report with the most completions during the same period at 24,800 units.


7. Multifamily housing construction starts reach highest in more than three decades

Multifamily housing starts at buildings with 5 or more units were up 42% YoY, according to the Census Bureau’s April 2021 residential construction report. A total of 612,000 housing starts were recorded, higher than the 12-month moving average. Starts rose 16% in the South, 10% in the Northeast and 5% in the West. However, they fell 17% in the Midwest on a MoM basis.


6. Fannie Mae projects multifamily starts to go up in 2022

Fannie Mae forecasts multifamily starts to go up 6.5% YoY to 502,000 units this year. This projection has been revised from its past month’s value, adding 20,000 units. For 2023, Fannie Mae is forecasting multifamily starts to 410,000 units. In contrast, single-family starts is forecasted to fall by 29,000 units this year and in 2023 by 72,000 units.


5. Apartment rent growth will not slow down 

Rent growth in the country is not going to slow down anytime soon, according to RealPage’s head of economies and industry Jay Parsons. In an interview, Parsons announced that unless the job market and demand starts to fall, apartment rent will continue to rise. Real estate firm Marcus & Millichap also revealed that property developers are constructing apartments at an accelerated pace to reach 400,000 new apartments in 2022.


4. Student housing market continue to surge

Industry research group Bonard reported that global student housing demand has not decreased significantly during the pandemic. In its Student Housing Annual Report 2021, the worldwide survey of student housing in 32 countries and 270 cities, many student housing providers had seen bookings return to pre-pandemic levels. According to the firm, students continued to travel to their preferred schools to attend on-site rather than online classes.


3. Renters prefer energy-efficient properties

In a survey conducted by nonprofit research group American Council for an Energy-Efficient Economy (ACEEE), prospective renters prefer to lease units that are energy-efficient. A sample of 2,455 renters answered a mock rental listing website where it was discovered that 21% are more willing to rent if they can find out energy efficiency details about the property. They were also willing to increase their monthly rent by 1.8%, which is equal to more than $400 of additional annual revenue for landlords for an average-priced unit in the country.


2. Phoenix is top city in the West for rent increase

Phoenix ranked first in the Mountain West region in terms of YoY rent increases at 15.6%, according to CBRE’s latest report. The region ranked sixth among all metros for multifamily investments over the past four quarters with $17.6 billion in total volume, up by 125% YoY ago. Total completions were recorded at 9,000 new units in the past four quarters. The impressive performance is attributed to coastal migration – despite the rent growth.


1. International investment in US multifamily sector set record at $21 billion

International investments in multifamily properties surged 30% in 2021, up from 24% in 2019, according to real estate firm Colliers. Foreign investors poured $21 billion on multinational and industrial properties, instead of office buildings. Because of the pandemic, experts agree that rather than spending on international travel, investors favored putting their money on real estate. This is observed especially on the multifamily market that is expected to grow even more, as 86% of foreign investors plan to increase their investments, according to the 2021 Association of Foreign Investors in Real Estate (AFIRE) report.


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