Published Nov. 19, 2012
The occupancy rate for multifamily apartment units in the Midlands is tightening and investors are re-entering the market, according to a third-quarter marketing study issued by Colliers International.
Growth in jobs and enrollment at the University of South Carolina are helping to attract investors, the commercial real estate firm reported.
Overall, apartment occupancy has increased 1.8% since January to 93.5% through the end of the third quarter, Colliers reported.
The average monthly rent, meanwhile, increased 1.3% since the end of the second quarter, and is up 3.7% for the year. The area’s average monthly rent of $756 has been relatively flat since 2009, the report said.
“It is, however, projected that rental rates will improve during the next year as occupancy rates rise,” the report said.
Sales of multifamily units are up as investors re-enter the market, Colliers said.
“Their re-emergency is due to a combination of an improved economy coupled with the lower returns currently available on many alternative investments,” Colliers said.
There were 116 units approved for construction between July and August, the report added.
The time to invest is ripe because the cost of borrowing is low, 81 million members of Generation Y have reached their prime renting years, and fewer new units are coming online, the report said.
Additionally, the growth in USC’s enrollment has attracted investors “who are seeking persistent demand and stable returns,” the reported added.
The report also noted that the Columbia metro area has added 8,800 jobs over the past year and the unemployment rate has dropped to 7.4% in September compared with 9% for the same month in 2011.