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New Apartment Deliveries Reach Record High

New multifamily construction deliveries reached a new high of 140,800 units in the fourth quarter of 2023, bringing the four-quarter total to a record 416,500, CBRE reported. That led to a slight increase in apartment vacancies and a slowdown in year-over-year net effective rent growth, although net absorption was four times the pre-pandemic average for Q4.

“Record new construction was met with robust renter demand in the fourth quarter,” said Kelli Carhart, leader of Multifamily Capital Markets for CBRE. “We anticipate investment activity to pick up beginning in the second quarter, driven by the Fed’s likely rate cuts, which will help improve capital markets conditions. An uptick in loan maturities will also create transaction opportunities for distress-focused investors.”

Construction starts are likely to continue tapering off this year, Yardi Matrix reported. However, the lag in new starts won’t affect deliveries for a while yet: Matrix analysts reported, “Yardi Matrix expects new construction to remain on a moderating trend in 2024. Meanwhile, multifamily completions will remain elevated in 2024 and early 2025 and will not bottom out until 2026.”

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CBRE's Carhart

About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 16-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 7-10 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).

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