Although multifamily has been less damaged by the recessionthan other commercial property types, it has nevertheless seen itsoccupancy erode even as landlords offer generous concessions. Arecent GlobeSt.com Quick Poll posed this question: "ApartmentOccupancy is High. Rent Hikes to Follow?" Nearly half--47%--saidno. More than a quarter, 28%, answered yes, while 25% respondedthat it was too soon to tell. Mark Scott, managing director andsenior vice president at NorthMarq Capital in Parsippany, NJ, tellsGlobeSt.com that while the long-term outlook for the multifamilysector is strong, rental increases are not on the immediatehorizon.

"I just came back from the ULI conference in San Francisco, andsome of the discussion there was that they expect rents to spike in2011. The reason for that is the lack of multifamily constructionthat is going on today.

Multifamily demand will continue to grow as our populationcontinues to increase. The US crossed over 300 million residents afew years ago, and we are going to cross over 400 million in a fewmore years. That bodes well for rents in the long term. But in theshort term, we need to rebuild our occupancy base. There has beensoftening throughout the nation as people have either moved back inwith Mom and Dad or partnered up with roommates. That has pushedvacancy rates higher across the nation, albeit multifamily has alower vacancy rate than industrial, office and retail. Certainly,multifamily is the sector that looks best today. But we have torebuild the occupancy base. It's a very competitive market outthere for tenants.

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