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
Adaptive Reuse | Oct 22, 2024
Adaptive reuse project transforms 1840s-era mill building into rental housing
A recently opened multifamily property in Lawrence, Mass., is an adaptive reuse of an 1840s-era mill building. Stone Mill Lofts is one of the first all-electric mixed-income multifamily properties in Massachusetts. The all-electric building meets ambitious modern energy codes and stringent National Park Service historic preservation guidelines.
MFPRO+ News | Oct 22, 2024
Project financing tempers robust demand for multifamily housing
AEC Giants with multifamily practices report that the sector has been struggling over the past year, despite the high demand for housing, especially affordable products.
Products and Materials | Oct 17, 2024
5 multifamily tech products for your next project
Multifamily housing and technological upgrades go hand-in-hand. From the rise in electric vehicle charging needs to the sophistication of smart home accessories, tech products are abound in the multifamily space.
Codes and Standards | Oct 16, 2024
North Carolina’s code policies likely worsened damage caused by Hurricane Helene
The North Carolina Legislature’s rejection of building code updates likely worsened the damage caused by Hurricane Helene, code experts say. Over the past 15 years, lawmakers rejected limits on construction on steep slopes, which might have reduced the number of homes destroyed by landslides.
MFPRO+ Research | Oct 15, 2024
Multifamily rents drop in September 2024
The average multifamily rent fell by $3 in September to $1,750, while year-over-year growth was unchanged at 0.9 percent.
MFPRO+ News | Oct 9, 2024
San Francisco unveils guidelines to streamline office-to-residential conversions
The San Francisco Department of Building Inspection announced a series of new building code guidelines clarifying adaptive reuse code provisions and exceptions for converting office-to-residential buildings. Developed in response to the Commercial to Residential Adaptive Reuse program established in July 2023, the guidelines aim to increase the viability of converting underutilized office buildings into housing by reducing regulatory barriers in specific zoning districts downtown.
Mixed-Use | Oct 7, 2024
New mixed-use tower by Studio Gang completes first phase of San Francisco waterfront redevelopment
Construction was recently completed on Verde, a new mixed-use tower along the San Francisco waterfront, marking the end of the first phase of the Mission Rock development. Verde is the fourth and final building of phase one of the 28-acre project that will be constructed in several phases guided by design principles developed by a design cohort led by Studio Gang.
Affordable Housing | Oct 4, 2024
3 new affordable housing projects for October 2024
As affordable housing continues to grow, more projects are looking to diversify their footprint by adding mixed-use components, community areas, and more.
MFPRO+ News | Sep 24, 2024
Major Massachusetts housing law aims to build or save 65,000 multifamily and single-family homes
Massachusetts Gov. Maura Healey recently signed far-reaching legislation to boost housing production and address the high cost of housing in the Bay State. The Affordable Homes Act aims to build or save 65,000 homes through $5.1 billion in spending and 49 policy initiatives.
MFPRO+ News | Sep 23, 2024
Minnesota bans cannabis smoking and vaping in multifamily housing units
Minnesota recently enacted a first-in-the-nation statewide ban on smoking and vaping cannabis in multifamily properties including in individual living units. The law has an exemption for those using marijuana for medical purposes.
