Suburban Markets
Suburban markets with high incomes may offer good returns for investors in the next stage of the apartment cycle, MPF’s Parsons said. The “vast majority” of the millennial generation, people born from the early 1980s to the early 2000s, don’t live in urban areas, he said.
“They don’t all want a luxury high-rise with bamboo floors, low-flow faucets and rooftop dog parks,” Parsons said. “The first wave that goes into the suburbs could do very well.”
Smaller cities led the roster of most-affordable apartment markets in the U.S. at the end of last year, led by Columbus, Ohio; Indianapolis; Oklahoma City; Las Vegas; and Raleigh, North Carolina. Each had a rent-to-income ratio averaging 17 percent, according to Axiometrics Inc., a Dallas-based research company.
That’s about half the maximum of one-third of gross income that’s typically required to qualify for a home mortgage.
Most Expensive
New York, which has long been an outlier, is the least affordable market, followed by Los Angeles, Miami, San Francisco, Boston and San Diego, according to Axiometrics. Excluding New York, those cities averaged 33 percent in rent-to- income ratios, while the U.S. as a whole averaged 24 percent, according to the firm.
Blackstone acquired the assets that form the bulk of LivCor from a unit of General Electric Co., which is paring real estate holdings. The firm took over GE’s partnership agreements with eight operating partners.
LivCor also oversees about 3,000 apartments that Blackstone bought in 2012 from Nationwide Insurance with a partner. About half of those homes are in the Pittsburgh area, where drilling in the Marcellus shale has been a boon to the local economy.
Blackstone’s operating partners both manage the LivCor properties and help find new deals, Meghji said.