Class B Properties Enjoy Strongest Growth
Digested from “Analyzing Apartment Asset Classes”
Axiometrics (9/22/15) Wolff Sorter, Amy
Class B apartment communities are outperforming Class A and C communities in occupancy and rent growth. New data show that occupancy rates at Class B apartment have remained at or above 95 percent since August 2014, while Class A rates dropped to almost 94.5 percent in January 2015 and Class C rates remained below the 95 percent mark until March 2015.
Rent growth for Class B properties has remained above 5.5 percent since February 2015. Class C properties had been experiencing similar growth up until then, but the gap has since widened. Class A properties spiked in June 2015 and have begun to approach the 5 percent growth mark.
Experts suspect that renters are looking for more affordable apartment homes, which is why Class B and C apartment communities are experiencing higher rent growth. But additional supply could stagnate occupancy rates and rents in the months ahead.