‘Operator Sentiment’ Means Caution on Rents

“There’s a lot of uncertainty among operators in terms of what’s coming next,” says Parsons.

RICHARDSON, TX—Next year will see an increase of about 10% to 20% on what is already a three-decade high for new apartment product, with scheduled deliveries in 2017 climbing to 353,000 units, up from 310,000 units in 2016. RealPage’s MPF Research is forecasting a moderation in rent growth for the coming year, with increases averaging about 3% to 3.5%. Cause and effect? Not entirely, Jay Parsons, VP of research with MPF, tells GlobeSt.com.

“The biggest factor is supply, but not necessarily in the way people think,” he says. “The general assumption in our industry, sometimes simplistically, is that if you have more supply you’re going to have less rent growth. That hasn’t really happened so far in this cycle; over the past couple of years, we’ve had a lot of supply and a lot of rent growth.”