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Cushman & Wakefield's Multifamily Construction Spotlight

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On December 26th, 2019

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Cushman & Wakefield's Multifamily Construction Spotlight

Multifamily construction activity this business cycle has consistently exceeded that of the previous decade. Class A development accounted for more than 68% of annual deliveries in the peak construction years of 2015-2018—and just 10 markets captured 36% of the deliveries.

Cushman & Wakefield's Multifamily spotlight explores the future of this sector, including these key highlights:

  • The construction wave was a response to robust rent and occupancy trends supported by renter household growth, particularly growth of affluent households.
  • Construction has peaked. Class A deliveries have declined precipitously, down 22% Q3 2017 YTD - Q3 2019 YTD, contributing to multifamily pipeline waning.
  • Construction will continue to soften and remain constrained due to rising construction costs, land scarcity in key pipeline markets, moderating rent growth and slower capital appreciation among multifamily assets.
  • We expect the current investor focus on workforce housing to continue in the near-term given the slower construction environment but also a cyclical reversion to Class A assets in the medium-term.

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bakersfield office

5060 California Ave
Suite 1000
Bakersfield, Ca 93309
(661) 327-2263
Brokerage License # 01919464

boise office

999 West Main Street
Suite 1300
Boise, ID 83702
(208) 287-9500
Brokerage License # LC45095

fresno office

9 River Park Place East
Suite 101
Fresno, Ca 93720
(559) 433-3500
Brokerage License # 01919464

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