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<br />• ~ :UIt,J `iC`J !i51" lil ':C~(S
<br />• ~r~eF~lta r~t~ c co~Je t~M-rer;t~l ~n~•~ rs~u=i
<br />~G~ I`iS
<br />MARKET BREAKDOWN
<br />l is it higl ti' ~~i;;li 1 ~ e ~ ;;tit d :-tt
<br />`~50 ~?~0 ~~:d (epo(ted ~.8°r, J~cane~;, do~~r,•~
<br />`IL(il .'i.,i'n. L .Ij tiL ~-,iced h III I ~"~~('
<br />~ - ' ~ Cr ~l` d; ,., Y,
<br />the South Central,, aaased the _:gest
<br />.Ili iU. ~<i$ wi;'~.` Ild 4cC8' y' (~
<br />Il ~ .`"o.
<br />Northeast a~ ~ r1t d t~ec ~o d ~ ~, ar~d
<br />~~e ,ge erns u-iped ~"0 t~ w~Fa~.
<br />Southwest J c.nt,~ r , rayed tc ;.4"%~~. (c°t
<br />Southeast'dacar~cy fill to 4.d°,/o, ~I~d rents
<br />~JJ e fa~rh; tlat ~t $~a62.
<br />Northwesty ..a.~v- a; a' ~'~._
<br />C1t5!IlC1r,St _ ~~.
<br />Downtown Minneapolis <<aca; ~i per to
<br />1 , ~;; ;nd r r~ ~ pen~:ed at ~ 1,100.
<br />Downtown St. Paul c r~ ~ ~ (`re ~ I ~1~.:, ui
<br />((0111 `~',~!' . ~,llt ti~~Ce Ct 1118eL'i a (t.~`;!o
<br />~~n is M;l~acmt, Ii ~~:!: ~~..
<br />Apartment Market Is Healthy, but SlowJob
<br />Growth, Flat Economy Will Have Impact
<br />t7ecreasin~; c;tcxney rates, increasing
<br />rents, disappcaritrg coucess~orrs, Eittlu~ netiv
<br />constr~uccion Fwd a weak for-sale housing
<br />In:nke~t area honing vvea] for dri' 'T~4sin C7t-
<br />ies apartment m:u ket. Vacancy cropped
<br />to , U9o in third quarter trout -C"e one
<br />year aC;v ~~nd a lai~la of ~.4 in~',OU=}.
<br />intprt>ving fiuad;unrnta; meant landlords
<br />raised rents. Average rent ~v:as ~;~~}tl, it},
<br />~ ~ ?6 from one t'c a a~;o. <.oncc^ssior.~s are
<br />6aiating oft; so pure rent r,~ross=th ss~iJ1
<br />oct ur mocin~ forward.
<br />CONSTROCTION IS SLOW
<br />t).~spire improving conditions, devc~~iop-
<br />meut retrra~ined spotty, partic~l:v~ly in
<br />thc• stbuahs. ~lpproaiutatel}- 5;0 emits
<br />opened ~n ?Ot~7---tm~st in 1A-7inu~apo...
<br />lv.. Most dcveluptrtent is occ~urriar:; in
<br />hi,*6er-irtcorne. higher-_deniand arias
<br />s~-hcrr developers bclicve there is lughi•r
<br />runt potent~i:a.l. 1\pprosirn,uclc 557 mots
<br />arr~ projected for ?OU8 an l '1 570 ii~r
<br />~(ti)9. 1)~veli,pnrc~tii is shrggis}t because
<br />constrlaciron costs arcprolaibitic, and
<br />rent levels ,renerallv are not high ettou~.;h
<br />to lusdti urw antstrut;tit?n. Alsf~> 1,.-c~pin~,
<br />a lid on consi~ructiotr arc a I~tci;: of good
<br />;etc,, cities that are ".nett-apartment" and
<br />the uucert:dntti ofhosti-;nan~ condo-to-
<br />rental ci,nvcrsions i~-ill occur.
<br />NOOSING DOWNTORN IMPACTS RENTALS
<br />F~ew•er renters art: leaautg apartments Ii~r
<br />h~;me.<nvnersttip. L<xut terms are t.{rlri<:ult,
<br />:ux~ there is uncertainty in the hous-
<br />ing market. Average borne values in the
<br />I'svin Cities plummetexl; the aver~rgc~
<br />vane i doc~ n :uurth~t ~`_~ (tone 20iili to
<br />~*"41G.5i)Ci. But the bad ne~~s is tl'te drop
<br />in job ~msirth. which affe~;ts al.,artment
<br />demand. 1vlirutesota's ttuc~~trtpli?yutent rate
<br />~~.~:.ceeded the LT. ti. rate Sn Sel?teanber For
<br />the tlrst tune in year>. `
<br />RENOVATION IS TREND
<br />lC'ith constraint; on nc~~c constructiou,
<br />landk,rds ~u-e renovating esistin~r proper-
<br />tie and pusl:~ing rents. Coarsiderahie
<br />inaestor intirrest today is in nalu~:-add.
<br />c,raportunities. ;risen the scarcity of newer
<br />1?ropcn)~ sales and tlsr^ tnarkct recovery
<br />that is uuderti`;ry.
<br />The Outlook
<br />it should be a good rr:n fc,r laudloz~cls.
<br />ln~irnarily because the. lid is still ou ncte
<br />development. The market condi-
<br />tion> tr~dasr suggest the begirutin~ oi'
<br />~t deg.°elopn.ent cycle. 1)ue to the Tlat
<br />economy, spotty consrruetiou wilE c,o-
<br />crt3~ iu higher-irtcomc ;{recs. Noy-v~1~~r,
<br />there will not l,e a dramatic' increase in
<br />supply as high co~7etructi<:rn costs and
<br />runt lc•s els do nor. justit:~- a for of new
<br />developrrreut. ~Ihe market is healthy,
<br />but giti>en the state of die econouty
<br />and uttcerrair~ty .te~soc:rated kith tlxe~
<br />sub-};rime taIlcaat, rent growth wit] be
<br />niodeit. Fume vts.~estur.~-tat opportun~-
<br />ties ~; ill 1?e as,ociated with rehabs. ^
<br />MULTi-FAMILY VACANCY
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