HOUSTON, TX - Houston’s multifamily leasing activity significantly increased in 2017, with strong signs of economic tailwinds lifting the apartment market in the upcoming year, according to Berkadia’s 2018 Forecast Houston Multifamily Report. Last year’s 22,353 absorbed units doubled that of 2016, thanks to rising demand leading to a 50-basis point rise in occupancy to 92.8 percent in December.
Surging demand in the multifamily sector, along with accelerated hiring, is expected to increase absorption by approximately 13 percent in 2018, as more apartment inventory and 7,579 units are scheduled to come online by year-end.
“With a rise in population throughout the Greater Houston area, as well as anticipated total nonfarm employment expanding by 40 basis points in 2018, the apartment market will see continued investment activity with strong fundamentals,” said Ryan Epstein, Senior Managing Director of Berkadia’s Houston office. “Occupancy may reach 94.5 percent by December, an increase of 170 basis points from 2017.”
Other highlights of the report:
Effective rent is forecast to rise 3.6 percent by December to $1,079, up from 0.3 percent annual growth in 2017.
The metro trend will be reflected by the Montrose/River Oaks submarket, where monthly rent is expected to rise 3.3 percent to $1,630 by December.
Work from rebuilding following Hurricane Harvey, as well as large-scale projects such as the $820 million Houston Ship Channel marine terminal, will contribute to the 26,300 overall jobs expected to be added.
About Berkadia: Berkadia, a joint venture of Berkshire Hathaway and Leucadia National Corporation, is a leader in the commercial real estate industry, offering a robust suite of services to our multifamily and commercial property clients. Through our integrated mortgage banking, investment sales and servicing platform, Berkadia delivers comprehensive real estate solutions for the entire life cycle of our clients’ assets.
To learn more about Berkadia, please visit www.berkadia.com