A wide and more diverse variety of rental products is being developed in western markets. Builders are developing a range of products that include townhomes with garages (often re-purposed for-sale product in suburban areas), low and mid-rise buildings in suburban and urban locations, and converting busted condo deals to rental. In San Diego, the 680-unit Vantage Pointe high-rise purchased by Equity Residential in Fall 2010 is nearing 80% occupancy after less than a year. Changes in demographics, lifestyle preferences, continued urban re-development close to job centers and financial constraints are all contributing to a more diverse demand for rental unit products and locations.
The apartment market clearly presents great opportunity in coming years. A combination of solid macro analysis as well as location-specific analysis will assure that investors make the right decisions. Projecting future supply, as well as understanding renter options for homeownership, will be two very important pieces of analysis that are often overlooked. If you are interested in our Apartment Market Monitor or in a customized analysis of a specific project, contact us.