Rentals | Downtown Market Cools, Construction Still Booming
November 18, 2014
Ok, to be fair, rentals have always been seasonal. However, this fall buildings have seen less foot traffic and subsequently less rentals, causing them to increase concessions and incentives or simply lower rents to lure more prospects and appease their investors.
Although the absorption rate for 2014 was pretty much a wash with the new supply, next year, and particularly 2016, will be a different story. Many are expecting absorption to rise to 2,400 units in 2015 when we will have over 3,100 apartments to fill. In 2016 developers may complete as many as 6,400 new apartments. Simple math will show you this is going to knock us into imbalance with supply outstripping demand.
I have talked about this before but we can expect a few things to happen.
Landlords are not going to be able to demand the rents that have attracted them to develop in the first place. Tenants are going to have more leverage to lock in a rate that would make the renters of today very jealous.
Some of these shiny new buildings are going to sit empty and have no choice but to flip condo. This is going to be a great opportunity for buyers as new condo construction is still hard to access for most.
Read the full story on Crain's here. Curious to see what some of these new buildings will look like? Access the gallery here.