NEW YORK CITY—There are many schools of thought about themultifamily asset class and whether developers, lured by theseemingly never-ending demand for the product, areoverbuilding.
One is that demand is, in fact, never-ending or at least notnearly close to saturation. Industry observers will point to shadowdemand for apartment living, such as the young adults that arestarting to find jobs and move out of their parents' basements.NAREIT, for example, is an advocate of this view and has doneserious research establishing that demand will trump supply formultifamily for years to come.
Another school of thought is the pessimistic view that so muchsupply is entering the pipeline that, while it may not house everylast millennial who is looking for his or her own roof, it willstart to have a significant impact on pricing—both in rental flowsand in investment sales.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
