High-Rise Apartments Remain the Most Popular
Digested from “High-Rise v. Garden-Style: Examining the Path to Prosperity”
Property Management Insider (6/16/15) Wegman, David
When comparing apartment community types, the clear winner for higher effective rents and NOI growth is high-rise apartments, Property Management Insider report. In fact, NOI growth in high-rises has far exceeded garden-style apartment communities in the past 15 years. High-rise communities experience more volatility. However, they also attract more renters by choice, which has made them seem almost recession-proof.
However, this doesn’t mean garden-style apartments should be avoided. Garden-style communities enjoy a higher income yield advantage and better risk-adjusted returns by a slight margin.
And apartments across the board offer a significant growth trajectory, continuing to produce favorable risk-adjusted returns, higher dividend payout ratios and a healthy growth of net operating income (NOI) compared with other property types. Among apartment community varieties, high-rises are seeing the best rent growth.