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Industrial real estate construction activity in the Chicago area held steady in the first three quarters of 2022

Multifamily Market Stands Up to Supply Pressure


This article has been updated with statistics from RealPage’s Axiometrics

The apartment market continued to withstand the pressure from added supply in the third quarter, as the national vacancy rate increased only 10 basis points to 4.5%, according to the latest 3Q market report by Reis. RealPage’s Axiometrics also reported a 4.5% vacancy rate (95.5% occupancy). That was somewhat surprising, since so much underway construction was expected to push vacancy rates higher.

Axiometrics Vice President Jay Denton anticipated that occupancy could fall in the coming months, partly due to seasonality, and partly due to a supply increase.

Total inventory is still expected to increase significantly in 2017 and 2018, however, construction in the third quarter, 47,271 units, was again lower than expected. Reis Senior Economist Barbara Byrne Denham notes this number should be revised once things get settled in Florida and Houston – two areas that have seen significant construction this year.

Perhaps more importantly, asking rents increased 1% in the third quarter, while effective rents grew 0.9%, according to Reis. Meanwhile, metrics from Axiometrics noted that annual rent growth for Q3 held steady between 2.5%-3%.

The underlying strength in the apartment market was confirmed by the rent growth rates: only six metros experienced a decline in effective rent in the quarter. These healthy growth rates reflect an overall confidence that future demand or occupancy growth will continue to keep pace with expected supply growth, at least in most metros.

Connect With Reis’ Byrne Denham

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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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