Apartment Rental News Weekly Update: Morning Has Broken
REITs Boost Occupancy Rates
Last week, some good news for the multifamily industry appeared in an article from Multifamily Executive article titled Apartment Firms Report Slight Upticks in Occupancy. The data primarily comes from REITs, who have ostensibly been reducing rents in an attempt to boost short term occupancy. REITs prices have taken it on the chin during the first two quarters on 2009, prompting an increase in dividends and more recently, it appears that many are undertaking the strategy (at least in soft markets) of getting renters into their properties and betting that it will be less costly to retain them at lower rents than wait for a market recovery to charge higher rents.
REITs like UDR have been able to increase occupancy by using investment capital to maintain properties while at the same time cutting rents, thereby becoming an attractive alternative to all renters. UDR's senior vice president of operations also credited that company's technology-based leasing initiatives with having a major impact on reaching out to potential renters. [Multifamily Executive]
San Francisco Apartment Rental Market Stabilizes?
In a related story, the cover of this morning's San Francisco Examiner featured a “Calling All Tenants" article, alerting renters around the city to the deals on San Francisco apartments. Luxury apartments and condo conversions that once had astronomical price tags are now desperate for tenants. Paying over a $1,000 for a room in a 3 bedroom apartment in Hayes Valley? You may be able to afford a luxury 1 bedroom less than a mile away.
Forcing vacancy rates up and effective rents down are the combined factors of a surplus of new development conversions in the SoMa district, a loss of 43,000 jobs between Septemeber 2008 and May 2009 and the high cost of living in San Francisco.
The interesting section of this article comes from a quote by International Colliers residential broker Stephen Jackson, who said, “The market, for the most part, has stabilized." Indeed, the figures show that the average rent for a one-bedroom apartment bottomed out at $1,874 in May 2009 (rising to $1,902 in June). Does this indicate equilibrium? [San Francisco Examiner]
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2 Responses to “Apartment Rental News Weekly Update: Morning Has Broken"
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October 15th, 2009 at 9:48 am
I would have to disagree with you. The Rental Market in San Francisco is turmoil. Rents continue to be inflated and people are leaving the city because of the recession.
October 27th, 2009 at 1:36 am
Exactly agree with SFRenter, the landlords/agents just keep repeating the listings on Craigslist at the inflated price until some sucker comes along and accepts it. There are so many vacant apartments – it's ludicrous.