In Vol. 30 No. 1 of the Crittenden Multifamily Report, Andre Soroudi, Director of Acquisitions/Development of CGI+ gives his general predictions for the multifamily market in 2021 and the biggest changes to the market due to COVID-19.
Regarding predictions for the multifamily market in 2021 Soroudi says, “I believe 2021 will see two trends: The emergence of strong suburban markets and the re-stabilization of Class A markets. Strong suburban markets will outperform as a significant number of employees find themselves with permanent hybrid work models, which allow them to live further away from offices. The suburban cities that offer strong school districts, increased affordability and space, while maintaining some of the amenities common to cities such as dining and retail will become an attractive alternative for these people and thus see an influx in both the rental and for-sale space. I also see a return to true A Class locations towards the middle and later parts of the year as a vaccine becomes widely available. These locations often have huge supply/demand imbalances and long-term attractions that will see people return to them first. The urban Class B space I believe will continue to struggle with occupancy and concessions throughout the year.”
Regarding the biggest changes to the market due to COVID-19 Soroudi says, “I believe we will see certain design and operation changes become more prevalent to apartments. Office/work spaces in apartments will become a top in-unit amenity. Automation technology will become more widely adopted in buildings especially when it comes to package delivery. Increased cleaning practices in common areas will become normal and expected long after the pandemic ends. On a macro front, cheaper debt prices and increased capital brought by improved market visibility will see cap rate compression throughout the year in well-performing submarkets.”