Apartment developers are focusing increasingly on the high end of the market, according to an analysis by RENTCafe of data from its sister company, Yardi Matrix.
More and more trendy new apartment buildings are springing up in cities across the country. An unusually high number of upscale rental developments are being built at an unprecedented pace, redefining rental markets nationwide. The movement has spread beyond mature metro areas like Miami, FL or San Francisco, CA. The apartment construction focus has shifted significantly, and cities as small as Kansas City, MO or Milwaukee, WI are emerging as the new markets for luxury.
A closer look at the data reveals that in 2015, 75% of all large multi-family rental developments completed were high-end rentals. The ratio of high-end to total apartments completed increased by a staggering 63% from 2012. In absolute numbers, this translates into 896 luxury multi-family projects of 50+ units (out of a total of 1,188 total projects) completed in 2015, compared to 382 luxury multi-family projects of 50+ units completed 3 years prior.
Moreover, early 2016 data suggests that the luxury apartment market sees no sign of slowdown. Of all large apartment buildings finalized in the first quarter of 2016, 79% were categorized as luxury.