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WASHINGTON, DC-Both nationwide and locally, multifamily housing has been seen as a safe haven for real estate investing. And generally, real estate experts have said that the District’s real estate market remains healthy and protected from the fallout of the September 11 terrorist attacks. However, a recent report by Transwestern Commercial Services and its research subsidiary, Delta Associates of Alexandria VA, indicates the class B multifamily market in Washington may taper off slightly.

In a research report, Delta Associates said that before the terrorist attacks, class B apartment real estate was expected to maintain low vacancy rates and have rent increases at or near 5% each year for the next two years. However, the report notes that tenants in this submarket tend to be the very people that had jobs in tourism, hospitality and transportation that were affected or eliminated after the attacks. Thousands of people in the District have filed for unemployment from positions they formerly held at one of the more than 100 hotels in the city, or at Ronald Reagan National Airport just across the Potomac River in Alexandria. Since folks in these types of positions tend to occupy class B apartments, the firms said, they both expected a flattening of rents over the next six months. The report expected vacancy rates to inch up further.

Delta Associates said it surveyed 31 class B apartment submarkets in the Washington metropolitan area. The firm defines class B product as well maintained, older product, generally built in the 1960s or 1970s, does not offer a separate clubhouse nor decorated model unit nor two bedroom/two bathroom floor plans. The firm said class B communities typically offer limited project amenities, and the landlord tends to pay gas and or electric for common areas and individual units.

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