Top 5 markets for construction activities

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As the demand for apartment buildings has continued to grow in recent years, development activity has also increased by nearly 1 million units in the past three years, according to Yardi Matrix data. This year should be another solid outing for rental deliveries, but the number of units to be completed in 2020 depends heavily on external factors, including the length of the shutdown, whether construction was deemed necessary, and costs and Work restrictions.

Nationwide, the developers worked on around 580,510 units, which made up 2.3 percent of the inventory. The five largest multi-family stores accounted for almost 30 percent of the current units. So looking at the markets where development activity makes up the highest percentage of stocks gives a different list of markets. Construction activity in the metros on this list accounts for up to 8.3 percent of the existing inventory.

5. Denver

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Colorado’s construction sector was classified as material under the statewide coronavirus regulation, which meant ongoing projects were allowed to continue. Denver multi-family development activities have been booming, with nearly 30,000 units shipped in the past two years. And although completions are expected to hit a new high of more than 18,000 homes this year, it is still uncertain how many of them will be postponed due to the COVID-19 outbreak. The developers completed around 4,000 units by April this year. A total of more than 22,000 units were in transit, 4.9 percent of the metro’s inventory.

AMLI Residential is working to expand its Denver presence to two parishes for a total of 742 units. In the submarket CBD / Five Points / North Capitol Hill of the Metro, the developer is building a 390-unit project called AMLI RiNo, which is expected to go online at the end of next year. And in the Arapahoe-Southwest submarket, the Atlanta-based company is developing the AMLI Littleton Village with 352 units, which meets LEED Gold standards and is expected to comprise 9,000 square meters of retail space. Meanwhile, the largest multi-family project underway is the 10th & Acoma by Lennar Multifamily Communities, a 393-unit community developed with the help of a $ 90.7 million home loan from JPMorgan Chase.

4. Florida Southwest Coast

The subway multi-family market has been in expansion mode for almost five years, which has had a major impact on the construction labor market. This year it was expected to beat completion numbers from previous years with more than 6,000 units going online. While South Florida has decided not to stop construction amid the coronavirus pandemic, it is still uncertain how many of the ongoing multi-family projects in the subway will be completed by the end of the year. At the end of April, the developers were working on 6,700 units, which corresponds to 5.1 percent of the existing stock of the subway.

In the Fort Myers-Central submarket, Norstar is working on The Vistas 360 unit in Eastwood. The upcoming 16-building community is expected to go online later this year and will be the submarket’s second largest completion in the past decade. The project was developed on a $ 27.5 million loan from Hancock Whitney Bank and is likely to include one to three bedroom units ranging from 718 to 1,282 square feet. Meanwhile, Spring Bay Property Co. was building the 329-unit Ridgelake in the Outlying Sarasota County submarket. The company secured a $ 55.4 million home loan to develop the 15 building project.

3. Miami

Image via Pixabay
Image via Pixabay

With a significant portion of the subway’s growth tied closely to the leisure and hospitality industries, Miami is likely to be heavily impacted by the coronavirus crisis, at least in the short term. The sector accounted for 11.5 percent of the labor market prior to the pandemic, with the bulk of jobs being lost due to travel restrictions and measures to prevent the virus from spreading. However, the recovery could be shortened by Miami’s efforts in recent years to diversify its economy, which have also contributed to population growth. This increased the demand for apartment buildings, with development activities picking up speed in the past two years. A total of almost 18,500 units were in transit at the end of April, which corresponds to 5.5 percent of the metro’s multi-family stock.

In downtown Miami, the Melo Group is working on the largest multi-family development in the subway, Downtown 5th with 1,042 units. When completed, the 55-story property will be the largest residential complex in the submarket to date. The company is also developing Miami Plaza, a 425-apartment project in the Edgewater submarket, using a $ 67.7 million home loan from Truist Bank. And in the Fontainebleau-University Park submarket, Atlantic Housing Foundation and Global City Development are working on an 886-unit student housing project called The One at University City.

2. Charleston, SC

Thanks to increased shipping activity in the Port of Charleston, the subway population and multi-family markets have expanded significantly in recent years. Charleston’s population has grown more than 20 percent in the past decade, creating strong demand for new multi-family inventory. The completions reached a cycle high of over 4,500 units in 2018, 52 percent more than in the previous year. While Charleston issued stay-at-home orders to prevent the spread of the coronavirus, it also classified construction as an essential business. At the end of April, 5,300 units were under development in the metro, that is 6.2 percent of the stock.

The Phillips Management Group’s 480-unit Crescent Pointe is underway in North Charleston. The company arranged a $ 24.2 million home loan for the emerging community, which will be the largest apartment building in the sub-market. About 4 miles away, Hathaway Development is expanding its North Charleston presence with the construction of the 312-apartment Exchange in Windsor Hill. The project is underway thanks to a $ 24.8 million home loan from Ameris Bank.

1. Boise, Idaho

Boise, Idaho.  Image via Pixabay
Image via Pixabay

Last year, Boise was among the top 5 markets in the country for rental increases in apartment buildings thanks to healthy population and employment gains from lower living costs and lower business costs. The metro’s population has risen 21.5 percent since the 2010 census, according to July 2019 figures. As a result, multi-family demand rose with 1,604 apartments completed last year, the highest in a decade. The developers were working on almost 3,100 units at the end of April, which corresponds to 8.3 percent of the inventory. And since housing construction is one of the essential activities allowed to continue during the statewide lockdown, development activities shouldn’t be severely impacted by the pandemic.

The Burrell Group secured a $ 31.5 million loan from Century Bank to develop a 480-unit student housing complex in the Metro’s Meridian submarket. The property, which comprises 20 buildings and is located in an opportunity zone, should go online as early as next year. Upon completion, it will be both the company’s first property on the market and the largest community in the submarket. Less than five miles away, The Wolff Co. is working on the 336-unit Indigo for which it has received a $ 26.5 million home loan from the TCF National Bank.

Yardi Matrix covers all apartment buildings larger than 50 units in 133 markets in the United States. This ranking reflects properties that are under construction within this sample group.

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