Page 2 of 2 Previous
The Brunsfield North Loop is among dozens of Twin Cities apartment buildings that have been bought or developed by companies new to this market. That includes Greystar, a Houston company that’s building several hundred units in the Uptown neighborhood, and Magellan, a Chicago-based developer that’s building a sleek glass-and-steel apartment tower near Loring Park.
Real estate prices in the Twin Cities are relatively inexpensive compared with some of the most high-profile markets, including Manhattan, Chicago and San Francisco, where there are fears that those markets are overheated and investors are experiencing “yield fatigue.”
Few apartment vacancies
With rents on the rise and rental vacancy rates at a near-record low of 2.8 percent, the Twin Cities was among the tightest rental markets in the nation last month, according to a quarterly survey of rental markets from Reis Inc., a New York-based real estate research firm. That was the seventh highest vacancy rate in the nation, just behind New York City, San Francisco and New Haven, Conn., which had the lowest vacancy rate (2.2 percent) in the nation.
“The apartment market has been on quite a tear over the last four years, with demand seemingly insatiable,” said Ryan Severino, a Reis senior economist. Nationwide, about 127,000 new apartments were delivered during 2013, he noted, which is in line with the long-term historical average and the highest annual total since 2009.
With buyers on the hunt and developers on a roll, property owners in the Twin Cities are sure to see the value of their holdings rise. Just how much depends on the strength of the recovery, and the depth of recent hiring gains.
If current conditions continue, apartment owners are expected be in the driver’s seat until at least 2017, according to the real estate firm Cassidy Turley. And that means extra attention for Twin Cities properties from outside investors for at least two more years.
“The fundamentals and dynamics of this marketplace are really attractive,” said Julie Lux, a Cassidy associate vice president. “That outstate money is still very aggressive.”
firstname.lastname@example.org • 612-673-7752 email@example.com • 612-673-7376