Ten-X: Buy in Orlando, Sell in NJ

IRVINE, CA—Current and expected economic fundamentals as of the third quarter of 2015 are leading Ten-X (formerly Auction.com) to rank Orlando as the nation's top multifamily market in which to invest, while also suggesting that apartment investors in Northern New Jersey and four other eastern markets consider selling. GlobeSt.com Thought Leader Ten-X bases its rankings for both the buy and sell sides on projected NOI growth, vacancy improvement and positive rents in each market.

With post-recession employment now at record highs, Orlando leads a top-five “buy” list that also includes Raleigh-Durham, NC; Fort Lauderdale, FL; Phoenix; and Sacramento. Conversely, slow employment growth and poor demographics stymie Northern New Jersey's multifamily market; the region is joined on the “sell” list by Philadelphia, Miami, Pittsburgh and Boston. While none of the “sell” markets could be called depressed, all are affected by slowing economic outlooks and diminishing employment, Ten-X says.

In the case of Pittsburgh, for example, Ten-X sees job growth taking a hit from low prices for natural gas, while Boston's economy continues to be healthy but has experienced a slowdown in employment gains since this past June. At the other end of the spectrum, the Raleigh-Durham metro area joins Orlando in enjoying record levels of employment, nearly 17% above the region's post-recessionary low.

Ten-X's latest Multifamily Market Outlook Report also looks at the acceleration in apartment construction as demand drivers remain strong. On a nationwide basis, effective rents were up by 4.3% year over year as of Q3, while cap rates in Q3 compressed 20 basis points from the previous quarter to 5.8%.

And if investors in the cities on Ten-X's “sell” list decide to follow the online marketplace's advice, they're unlikely to find a shortage of takers for the properties. “The overall multifamily sector remains healthy and the trend of renting instead of owning continues across the US,” says Peter Muoio, chief economist at Ten-X. “Despite being six years into its expansion, the demand drivers for multifamily are still in place with no signal of waning in the coming years.”

IRVINE, CA—Current and expected economic fundamentals as of the third quarter of 2015 are leading Ten-X (formerly Auction.com) to rank Orlando as the nation's top multifamily market in which to invest, while also suggesting that apartment investors in Northern New Jersey and four other eastern markets consider selling. GlobeSt.com Thought Leader Ten-X bases its rankings for both the buy and sell sides on projected NOI growth, vacancy improvement and positive rents in each market.

With post-recession employment now at record highs, Orlando leads a top-five “buy” list that also includes Raleigh-Durham, NC; Fort Lauderdale, FL; Phoenix; and Sacramento. Conversely, slow employment growth and poor demographics stymie Northern New Jersey's multifamily market; the region is joined on the “sell” list by Philadelphia, Miami, Pittsburgh and Boston. While none of the “sell” markets could be called depressed, all are affected by slowing economic outlooks and diminishing employment, Ten-X says.

In the case of Pittsburgh, for example, Ten-X sees job growth taking a hit from low prices for natural gas, while Boston's economy continues to be healthy but has experienced a slowdown in employment gains since this past June. At the other end of the spectrum, the Raleigh-Durham metro area joins Orlando in enjoying record levels of employment, nearly 17% above the region's post-recessionary low.

Ten-X's latest Multifamily Market Outlook Report also looks at the acceleration in apartment construction as demand drivers remain strong. On a nationwide basis, effective rents were up by 4.3% year over year as of Q3, while cap rates in Q3 compressed 20 basis points from the previous quarter to 5.8%.

And if investors in the cities on Ten-X's “sell” list decide to follow the online marketplace's advice, they're unlikely to find a shortage of takers for the properties. “The overall multifamily sector remains healthy and the trend of renting instead of owning continues across the US,” says Peter Muoio, chief economist at Ten-X. “Despite being six years into its expansion, the demand drivers for multifamily are still in place with no signal of waning in the coming years.”