Developing Story: The Dichotomy of Multifamily and Commercial Development
The overwhelming storyline in today’s institutional real estate development industry is the stark contrast between the multifamily development space and the rest of the industry. Robust capital markets, limited new supply during the past several years and a fundamental shift in the public’s view of homeownership has created an environment where shovel-ready, infill multifamily developments located in gateway cities are aggressively sought. The development story for the remaining product types is comparatively less interesting, as slowly improving market fundamentals have not rebounded to levels sufficient to warrant new supply. Below is a survey of the development landscape across all product types with a focus on multifamily development.
MULTIFAMILY DEVELOPMENT The fundamental understanding of most market participants is that the multifamily housing space is profoundly undersupplied. The economic recession of the past four years created a situation