Multifamily Demand 'Clearly Rebounding' for Cushman & Wakefield
Occupancy and lease renewal rates are up, concessions mostly burning off.
Cushman & Wakefield reported an excellent Q2 for its multifamily portfolio, with demand practically at a 20+ year high, occupancy expansion, above-benchmark renewal rates, concessions mostly burning off, and most lease-ups gaining 20+ leases per month.
The company, which entered Q3 operating 178,000 apartment homes, saw a noticeable uptick in the volume of applications during the second quarter, which performed third-best since 2000 other than the pandemic period.
“Thanks to increasing competition from new supply, the broader market is seeing occupancy contract,” the firm said in a release. “[We] have not been immune in certain markets, but the strong interest levels have led to improving occupancy across the nation.”
Likewise, effective rent growth has slowed nationwide to more normalized levels following two years of outsized growth, as has that at Cushman & Wakefield.
But it remains well above the historical benchmark observed across the US at about 5.5% across its portfolio.
Both new leases and renewals have started to converge in recent months, as new lease trade outs pick up and renters renew in place at higher rates, the company said.
Communities in Cushman & Wakefield’s stabilized portfolio saw concessions pull back as Q2 ended.
And leases per month are averaging in the mid-20s range, though concessions vary across markets and submarkets.
RealPage Market Analytics reported last week that the seasonally adjusted annual rates for multifamily permitting and starts each declined month-over-month and year-over-year as of June of this year. According to the U.S. Census Bureau, the June permitting rate slowed 13.5%, from May to 467,000 units, which was a significant 33.1% drop from a year ago June. This continues a trend since starts were lower than initially reported in May.