employment status or work arrange- ment including the ability to work remotely (57 percent); and wanting a lifestyle change or improvement of quality of life (53 percent). Throughout the pandemic, Amer- icans have continued to abandon expensive gateway markets and large urban areas including New York City, Los Angeles, and San Francisco. These markets experi - enced significant population declines in 2020 and into 2021, according to the U.S. Census Bureau. While relocations from these mar - kets haven’t reached “exodus” level, non-gateway markets, particularly those in the country’s interior, have experienced significant population growth and in-migration. For exam - ple, smaller markets such as Austin, Denver, Nashville, Phoenix, Raleigh (N.C.), and Salt Lake City have seen their populations boom, as well as larger markets such as Atlanta and Dallas-Fort Worth. SEARCHING FOR MORE SPACE With Americans spending more time at home, larger apartments are increasingly appealing, particular- ly for those who WFH. Renters who need more space for kids and pets are gravitating to suburban, gar- den-style properties, which tend to be larger and more affordable (on a cost per square foot basis). Multifamily owners and managers have noted increased demand for floorplans that accommodate WFH. Across the nation, one-bedroom units with studies or dens, for exam- ple, have waiting lists, while occu- pancy rates for two-bedroom units have increased, even for those with only one bathroom. Suburban, garden-style prop- erties are also appealing because

of their surroundings. With many Americans afraid to socialize indoors, they’re looking for apart- ments that allow them to enjoy out - door activities, whether its hiking through nearby greenbelts or enjoy - ing the community’s pool. Additionally, many owners are investing in amenities that accom- modate renters who WFH. They’re renovating movie theaters and leas- ing offices to make space for work - Throughout the pandemic, mul- tifamily real estate has been rela- tively resilient, particularly when compared to other property types such as office, retail, and hospitali - ty, according to CBRE’s 2021 Global Investor Intentions Survey. It’s entirely accurate to say that investors have an insatiable appetite for U.S. multifamily assets. Multi- family is one of the top investments, with global investors ranking this sector as the second most preferred asset class behind industrial and logistics, according to CBRE. For 25 percent of investors, multifamily is the most preferred property type. Last year, the multifamily sec- tor experienced a smaller decrease in investment activity than most other mainstream asset types. The sector’s solid fundamentals – low vacancy rates and high rental col- lection rates – made it irresistible to private and institutional investors, both small and large. Roughly $146 billion of multi - stations and Zoom rooms. INSATIABLE APPETITE FOR MULTIFAMILY ASSETS family assets traded hands in 2020, according to CBRE. Cap rates began to compress late last year and have since tightened to historically low levels. At the end of Q1 2021, cap rates had fallen below four percent.

CBRE’s data indicates that more than half of the major U.S. markets experienced very little deterioration in renter demand or rents during the COVID pandemic. However, a number of gateway and coastal metros saw rents fall significantly. For example, rent in San Francisco, San Jose and New York decreased 10 percent to 20 percent. Fortunately, by midyear 2021, vacancy rates in nearly every mar- ket were falling and rents were rising. CBRE forecasts declining vacancy rates over the next 12 months, which will lead to sol- id rent growth of 5.6 percent. The firm anticipates that nearly all U.S. markets will exceed their pre-COVID rent levels by Q2 2022. Over the next 12 to 18 months, multifamily investors will tar- get Atlanta, Austin, Inland Empire (Southern California), Miami, Orlan - do, Phoenix, and Tampa. Investment in suburban multifamily assets will remain strong over that period, with cap rates further compressing across the nation. •

Joe Fairless is the Co-founder of Ashcroft Capital which has over $1B in assets under management. Joe created the podcast, Best Real Estate

Investing Advice Ever Show, which is the longest- running daily real estate podcast in the world and generates over 500,000 monthly downloads. He is also a proud Member of the Texas Tech Alumni Advisor Board for the College of Media and Communication, as well as being recognized as Outstanding Alumni at Texas Tech University, where he is a former Adjunct Professor. He is currently a Junior Achievement Board Member and Volunteer for the Cincinnati chapter and has been recognized by the Junior Achievement’s Free Enterprise Society. Joe volunteers at Crossroads Hospice and was recognized as Multifamily Investor of the Year by Think Realty Magazine.


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