22-Quarter Streak of Rising Rents Continues in Orange County According to NAI Capital’s Multifamily Market Outlook
Irvine, CA, Thursday, June 08, 2017– According to NAI Capital’s Multifamily Market Outlook, average asking rents for multifamily units rose this quarter, continuing a trend that has seen growth for the past 22 consecutive quarters. Apartment renters in Orange County this quarter paid an average of $1,806 per unit, 2.7% more than the average this time last year. In the first quarter of 2017, vacancy held tight at 3.2%, down 10 basis points from last year. Demand for multifamily housing is expected to remain strong in 2017. Southern California is experiencing a shortage of available housing units, particularly in Orange County. In the construction pipeline, 4,000 units are scheduled to deliver this year.
Key statistics for the Orange County Multifamily housing market:
- Average asking rental rate registered $1,806 per unit, up 2.7% over last year
- Vacancy (3.2%) was unchanged over the quarter, down 10 basis points over last year
- 3,047 units sold this quarter up 139% over the prior year
- Sale prices averaged $239,723 per unit, up 18.4% over last year
- Cap rates fell 20 basis points over the year to 4.43%
- 718 new units delivered this quarter, up 7.6% over first quarter 2016
Steve Heri, Senior Vice President, CCIM and Vice President Steve Gim with NAI Capital’s Multifamily Services Group, point out that historically an uptick in interest rates is followed by an increase in cap rates. However, because there has been such strong rent growth, the impact may be minor this time around.
Heri said, "Cap rates continue to be depressed with an abundance of capital demanding product. That being said, sellers do not have anywhere else to place their capital other than exchange. And we are seeing more exchanges in the market."
“In addition, when looking historically into the previous real estate cycles, when the Federal Reserve begins to raise interest rates, we see an increased number of sales and refinances due to uncertainty in the marketplace.” Added Gim.
To access the full Orange County Multifamily Market Outlook report, visit:
About NAI Capital
NAI Capital is the largest independently owned full service commercial real estate firm headquartered in Southern California. As one of the largest members of NAI Global, the premier managed commercial real estate service network with 400 Offices and 7,000 market leaders spanning the globe, NAI Capital provides a complete range of transaction, valuation, investment, property management and consulting services. By leveraging our local expertise with our global reach, NAI Capital offers innovative, customized solutions and seamless service to owners, tenants, investors and developers throughout Southern California. NAI Capital clients have built their businesses on the power of our expanding network. We are a dynamic growing commercial real estate company. At NAI Capital we work together putting our clients first.
NAI Capital Brokerage CA BRE #00806840.
To learn more, visit www.naicapital.com
About NAI Global
Founded in 1978, NAI Global is a leading global commercial real estate brokerage firm. NAI Global Offices are leaders in their local markets and work in unison to provide clients with exceptional solutions to their commercial real estate needs. NAI Global has more than 400 Offices strategically located throughout North America, Latin America, Europe, Africa and Asia Pacific, with over 7,000 local market professionals, managing in excess of over 425 million square feet of property. Annually, NAI Global completes in excess of $20 billion in commercial real estate transactions throughout the world.
NAI Global provides a complete range of corporate and institutional real estate services, including brokerage and leasing, property and facilities management, real estate investment and capital market services, due diligence, global supply chain and logistics consulting and related advisory services.
To learn more, visit www.naiglobal.com.
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