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Dealmaking activity abounded at the NMHC Annual Meeting in Orlando

Drop in Permits Signals Promise of Future Multifamily Market Balance

Multifamily development permits dropped 9.3% last month, but researchers at CBRE say that’s a favorable sign for future market balance. They point out that current construction activity is still at high levels, however, given the reduced permitting, a slowdown in both starts and under-construction totals can be expected in 2019.

U.S. multifamily demand remains healthy, writes CBRE in its latest U.S. MarketFlash. For the year ending Q2 2018, total net absorption was at its highest level in more than 15 years, according to CBRE Econometric Advisors data.

Despite high levels of construction activity, vacancy rates are only inching up slowly due to strong demand. The demand outlook is also favorable based on sustained economic growth, low levels of home buying and multifamily renters staying in rental units for longer periods.

September’s multifamily permitting activity totaled 351,000 units, according to the U.S. Census Bureau. This was the lowest rate since March 2016’s 343,000 units, and was also well below (-15.9%) the 2018 year-to-date average of 417,000 units.

CBRE writes, this is certainly good news for most of the multifamily industry, particularly owners and investors hoping for reduced deliveries that would lead to more market balance in the next few years.

The under-construction total, which represents deliveries over the following two years or so, will begin to edge down when the lower levels of units permitted translates into fewer starts. That trend likely will become apparent in 2019, notes CBRE.

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About Dennis Kaiser

Dennis Kaiser is Vice President of Content and Public Relations for Connect Commercial Real Estate. Dennis is a communications leader with more than 30 years of experience including as a journalist and in corporate and agency marketing communications roles. He is responsible for Connect’s client content operations and is involved in a range of initiatives ranging from content strategy, message development, copywriting, media relations, social media and content marketing services. In his most recent corporate communications roles, he led a regional public relations effort across Southern California for CBRE, played a key marketing role on JLL’s national retail team, and was responsible for directing the global public relations effort at ValleyCrest, the nation’s largest commercial landscape services company. In addition to his vast commercial real estate experience, Dennis has worked on communications and launch strategies for a number of residential projects such as Disney’s Celebration in Florida, Ritter Ranch in Palmdale California (7,200 homes, 22,000 acres), WaterColor in Florida and PremierGarage in Phoenix. Dennis’s agency background included firms such as Idea Hall and Macy + Associates. He has earned an outstanding reputation with organization leaders as a trusted advisor, strategic program implementer, consensus builder and exceptional collaborator. Dennis has developed and managed national communications programs for Fortune 500 companies to start-ups, both public and private. He’s successfully worked with journalists across the globe representing clients involved in major-breaking news stories, product launches, media tours, and company news announcements. Dennis has been involved in a host of charitable and community organizations including the American Cancer Society, Easter Seals, BoyScouts, Chrysalis Foundation, Freedom For Life, HOLA, L.A.’s BEST, Reach Out and Read, Super Bowl Host Committee, and Thunderbirds Charities.

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