Rehabs and rent growth spell apartment opportunities

Multifamily and commercial real estate investment trusts (REIT) are finding several paths to profit in the current market, according to recent data and earnings reports.

Higher turnover rates during the first quarter were an acceptable price for pushing rents, one REIT told Multifamily Executive. Despite seeing resident turnover grow to 56.4 percent, with 12 percent of move-outs triggered by higher rents, the firm noted an average rent increase of almost 9 percent as new tenants were brought in.

The REIT is considering further acquisitions and anticipates strong fundamentals, such as net operating income growth, during the rest of 2012. With occupancy levels at a reported 96.2 percent, rent growth may continue in some areas. Experts did note that Jacksonville, a major market for some, is experiencing slow development. This may pick up as a result of anticipated job growth later in the year, however.

Firms focusing on rehabilitation are also posting some strong results in the apartment sector, according to MFE. The top renovator for 2011 rehabbed more than twice as many properties as the rehab activity leader in 2010. High demand for quality rentals may continue to benefit rental property management and rehabilitation professionals, the data suggests.