AvalonBay Communities to Shift Focus to Suburbia
Digested from “Suburban chic?”
SNL (12/2/14) Mooney, Jake
In the summer of 2013, effective rent growth for multifamily communities in suburban areas surpassed that of traditionally strong urban markets. As suburban rent growth continues to climb at a rate greater than that in urban areas, which have been the primary focus of multifamily real estate investment trusts (REITs) such as Equity Residential, one REIT is changing course to capitalize on this burgeoning peripheral sector.
AvalonBay Communities announced in October 2014 that it would be shifting its focus to the suburbs because of increasing rent-growth trends and the new unit supply expected in the cities. The organization will still move forward with planned developments in hot markets, such as Manhattan, but it believes that data indicate there is more money to be made in markets outside the city.