Midwest Added Record Number of New Multifamily Units in 2017

08 Mar 2018

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Bolstered by declining vacancy rates and growing rents, the Midwest multifamily market added a record number of new multifamily units in 2017, according to the latest research from CBRE. 

A combined total of 32,845 new units were delivered throughout the region in 2017, toppling the previous record of 29,739 units in 1999. rel="noopener noreferrer" Of the 10 markets in the Midwest U.S. Multifamily report, Chicago led the region with 7,423 units completed in 2017 followed by Minneapolis (5,829 units) and Columbus (4,311 units).

Vacancy rates throughout the Midwest have also rebounded from recession highs boosting confidence in the multifamily sector. Recovery has been strongest in Detroit, where the vacancy rate fell 483 basis points since 2009 – the largest decline in overall vacancy throughout the Midwest. Minneapolis had the lowest vacancy rate among Midwest markets at 3.0 percent. 

“Since the recession, housing choices have changed and shifted toward rentals. While other markets have delivered enough product to meet the change in demand, the Midwest has lagged in that regard rel="noopener noreferrer" resulting in lower vacancy rates,” said Abe Appert, Executive Vice President. “This is the case in Minneapolis where the lack of supply and dynamic economic environment have contributed to historically low vacancy rates as the market quickly absorbs additional units.”

All 10 of the Midwest markets included in the report also saw positive rent growth between 2015 and 2017. Columbus recorded the biggest gain at 7.1 percent growth over this period, followed by Indianapolis (6.5 percent) and Detroit (6.0 percent). 

Rent growth and low vacancy rates are positive indicators for the multifamily investment market.

“In this stage of the cycle, we’re seeing a strong appetite from the investor community for acquisitions in secondary and tertiary markets, which has fueled sale activity in the Midwest,” Appert said.

About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2021 revenue). The company has more than 105,000 employees (excluding Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.