- November 1, 2016: Vol. 28, Number 10

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Running strong: Robust underlying demand fundamentals keep investors bullish on the apartment sector

by Larry Gray

Like Jamaican sprinter Usain Bolt, the apartment market shot out of the blocks once the dust settled from the global financial crisis. And like Bolt, who has held the title of “world’s fastest human” for nearly a decade, the apartment market’s run has been impressive.

On the heels of the financial market implosion and economic recession, the U.S. apartment market posted a dismal total return of –17.5 percent in 2009, according to the NCREIF Property Index apartment subindex. The apartment sector, however, came roaring back in 2010 with a total return of 18.2 percent and has been putting up impressive numbers ever since: 15.5 percent in 2011, 11.2 percent in 2012, 10.4 percent in 2013, 10.3 percent in 2014 and 12.0 percent in 2015. And keep in mind the NCREIF figures are all unleveraged returns, so many investors were achieving much higher leveraged returns.

While this apartment cycle has lacked the distressed selling and subsequent run-up in values that chara

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