Over 56 developers, operators, and investors across the country were surveyed in John Burns Research and Consulting's recently-launched Apartment Developer and Investor Survey. The November 2023 report collected two month's of data to find clarity in the multifamily market, including capital access, lease-up challenges, and the overall development pipeline.
Overall, Burns has outlined four key takeaways for developers and investors to be mindful of in 2024.
Burns Apartment Developer and Investor Survey Takeaways
1. Apartment developers anticipate a dramatic decrease in construction and new starts
As post-Covid construction has peaked, developers expect new apartment starts to slow by 20–50%.
Forty percent of developers surveyed have over 500 units currently under construction. While a surge of projects will finish by 2025, future starts are believed to slow dramatically.
Nearly all respondents have found securing financing to be increasingly difficult.
2. Investors “sidelined” as interest rates create cautious lenders
Apartment transactions have come to a halt as financing tightens and pricing uncertainty grows. Only 16% of those surveyed reported selling an apartment property in the last six months, and 70% say they are not planning to purchase in the next six months.
There was little consensus on current pricing levels. A few respondents believe their assets are undervalued, while the rest are split between seeing their assets as fairly-priced or overvalued. According to Burns, this disparity reflects the ongoing disconnect between buyers and sellers.
3. Affordability is an important factor for residents of newly opened communities
A significant factor for resident retention is affordability. The research finds that the most common reasons tenants won't renew their lease is to move into a less expensive apartment or to move in with roommates instead.
Three-quarters (75%) of respondents are averaging double-digit monthly leases at unstabilized communities as well, indicating healthy lease-up trends.
4. Thoughtful design and amenities—especially service-oriented ones—must be superior
According to Burns, developers have underscored the importance of project design and high-quality amenities. Those surveyed indicated that new communities must have amenities that are in-line, if not superior, to the competition.
Some have also begun focusing less on physical amenities like pools and parks, and more on service-oriented amenities such as concierge services.
Click here to access the entire Apartment Developer and Investor Survey.
Related Stories
Products and Materials | Sep 29, 2023
Top building products for September 2023
BD+C Editors break down 15 of the top building products this month, from smart light switches to glass wall systems.
Office Buildings | Sep 28, 2023
Structural engineering solutions for office-to-residential conversion
IMEG's Edwin Dean, Joe Gulden, and Doug Sweeney, share seven key focuses for structural engineers when planning office-to-residential conversions.
Multifamily Housing | Sep 26, 2023
Midwest metros see greatest rent increase in September 2023
While the median monthly price of rent has increased by 0.71% in August, the year-over-year estimates show a national change of -0.06 percent.
Contractors | Sep 25, 2023
Balfour Beatty expands its operations in Tampa Bay, Fla.
Balfour Beatty is expanding its leading construction operations into the Tampa Bay area offering specialized and expert services to deliver premier projects along Florida’s Gulf Coast.
Cladding and Facade Systems | Sep 22, 2023
5 building façade products for your next multifamily project
A building's façade acts as a first impression of the contents within. For the multifamily sector, they have the potential to draw in tenants on aesthetics alone.
MFPRO+ Blog | Sep 21, 2023
The benefits of strategic multifamily housing repositioning
With the rapid increase in new multifamily housing developments, owners of existing assets face increasing competition. As their assets age and the number of new developments increases seemingly day-by-day, developers will inevitably have to find a way to stay relevant.
Adaptive Reuse | Sep 19, 2023
Transforming shopping malls into 21st century neighborhoods
As we reimagine the antiquated shopping mall, Marc Asnis, AICP, Associate, Perkins&Will, details four first steps to consider.
MFPRO+ Research | Sep 11, 2023
Conversions of multifamily dwellings to ‘mansions’ leading to dwindling affordable stock
Small multifamily homes have historically provided inexpensive housing for renters and buyers, but developers have converted many of them in recent decades into larger, single-family units. This has worsened the affordable housing crisis, say researchers.
Designers | Sep 5, 2023
Optimizing interior design for human health
Page Southerland Page demonstrates how interior design influences our mood, mental health, and physical comfort.
Adaptive Reuse | Aug 31, 2023
New York City creates team to accelerate office-to-residential conversions
New York City has a new Office Conversion Accelerator Team that provides a single point of contact within city government to help speed adaptive reuse projects. Projects that create 50 or more housing units from office buildings are eligible for this new program.
