Despite a disruptive pandemic, investor demand for multifamily real estate was strong in 2020, according to a newly released Yardi Matrix Bulletin.
Around 252,000 apartment units were absorbed last year. That’s about 1.7% of total market stock and down 12% from the 286,300 apartments purchased in 2019.
“Considering the economic and social calamity that befell the U.S., in many respects due to COVID-19, the fact that demand held up as well as it did is a relief for the apartment industry,” say Matrix analysts.
Net absorption was strongest in 25 of the 30 largest metros, which accounted for 158,300 units absorbed. Dallas, Atlanta and Denver saw the highest absorption rates.
Negative absorption was centralized in key gateway markets hit hard by COVID-19, which also struggled with renter demand and average rents. The worst performers were the Bay Area and New York City, which combined for -22,100 units absorbed in 2020.
Overall, high-cost gateway metros had net absorption of -0.3% (-7,600 units). Demand was better in secondary (154,100 units, or 2.3% of total stock) and tertiary (96,200 units, or 2.0% of stock) markets.
On a regional level, renters continued to flock to the Southeast (96,700 units absorbed, or 2.4% of total stock), the Southwest (56,800 units, 2.1% of stock) and the West (57,100 units, 1.9% of stock). Meanwhile, demand was slightly positive in the Midwest (27,100 units, 1.1% of stock) and the Northeast (4,900 units, 0.2% of stock).
Here are the top 10 markets based on net multifamily absorption in 2020:
1. Dallas: 19,233 units; 2.4% net absorption of total stock; 93.8% occupancy rate in Dec. 2020
2. Atlanta: 12,864; 2.8%; 94.7%
3. Denver: 11,552; 4.0%; 94.5%
4. Phoenix: 10,082; 3.2%; 95.5%
5. Houston: 8,377; 1.3%; 92.1%
6. Austin, Texas: 7,893; 3.1%; 93.3%
7. Miami: 7,721; 2.5%; 94.4%
8. Tampa, Fla.: 6,196; 2.8%; 95.4%
9. Charlotte, N.C.: 6,073; 3.3%; 95.1%
10. San Antonio: 5,836; 2.8%; 93.0%
Related Stories
Coronavirus | Jun 19, 2020
Experts address COVID-19's impact on nursing homes and schools on The Weekly
The June 18 episode of BD+C's "The Weekly" is available for viewing on demand.
Senior Living Design | Jun 11, 2020
COVID-19: An "outdoor living room" for senior living residents to safely visit with their families
Aegis Living creates a plexiglass-wrapped outdoor space for residents to sit while visiting with family members.
Multifamily Housing | Jun 10, 2020
60-unit independent senior living facility completes in Crystal Lake, Ill.
UrbanWorks designed the project.
Multifamily Housing | Jun 9, 2020
Two 56-story prefabricated towers will make up Singapore’s newest residential district
ADDP Architects designed the project.
Multifamily Housing | Jun 4, 2020
Roof hatches selected for infill townhomes in Miami’s Little Havana neighborhood
Townhome project in Little Havana, Miam, Fla., uses BILCO roof hatches for reliability, code compliance.
Multifamily Housing | May 29, 2020
New multifamily project includes energy storage as an amenity
Each battery is linked to an on-site solar panel array.
Coronavirus | May 26, 2020
Multifamily developers report mounting delays in permitting and starts due to coronavirus pandemic
More than half (53%) of multifamily developer respondents reported construction delays in the jurisdictions where they operate, according to the third edition of the National Multifamily Housing Council (NMHC) COVID-19 Construction Survey.
Multifamily Housing | May 8, 2020
Nashville's newest residential tower will rise 416 feet
Goettsch Partners is designing the project.
Multifamily Housing | May 8, 2020
'Lakehouse' is the first multifamily project in Colorado to receive WELL Precertification
Stantec and Muñoz + Albin are the project's architects.
