These are the Most Insane Real Estate Developments of 2016

2016 is bringing in some of the most incredible real estate developments ever. Let’s take a look at some of these massive real estate projects.  There are some skyline changing mega towers that you need to see.  Here are 5 of the most exciting new developments.


Hudson Yards, New York

This is the largest private real estate development in New York, and the largest project in the history of the United States. It won’t be finished until 2024, but when it’s completed it will be remarkable. Over 17 million square feet are being built. This will be a mix of retail, office, residential, and hospitality properties. It is sure to be one of the great attractions of New York City. Here is a link to the project. Hudson Yards

Hunters Point Shipyard, San Francisco

This is a massive project, changing the entire hunter’s point area of San Francisco. Candlestick Park was demolished last year and the neighborhood is expecting big changes. Real estate prices have sharply risen throughout the city in the past years and the impact is being felt all throughout the region. An $8 billion dollar project that will contain over 3M SQ SF of office space and over 1000 residential homes is now being built. More on the project: Hunters Point Shipyard

Wilshire Grand, Los Angeles

Set to be the West Coast’s tallest tower, the new hotel will have over 900 rooms when it’s completed in January of 2017. The 73 story skyscraper will be set in the heart of downtown LA. This is a development that will change the Los Angeles skyline. Take a look at the project here: Wilshire Grand

 

The Miami Worldcenter, Miami

This multi-billion dollar project consist of entertainment, residential, hospitality,  and retail. There is a signature piece of the Worldcenter that will stand as a 700 foot tall residential skyscraper. A convention center and a Marriott Marquis are also in the plans. The completion date is scheduled for 2018. More here: Miami Worldcenter

Solaire, San Francisco

San Francisco’s Transbay Terminal area is changing fast, this 32 story residential tower has over 400 units. Leasing has already started on the building and move ins are scheduled to start May 15th, 2016. All of the luxury units have floor-to-ceiling windows designed to offer exceptional views of the bay. Take a look here: Solaire

Find Development Opportunities on Brevitas

These 5 Stats About Foreign Investment in US CRE May Surprise You

Interest in U.S. properties from international investors has been strong since the financial crisis, and the rate of investment has been accelerating in the last couple of years.  We can see evidence of this in the industry news, and we hear stories from colleagues, but the full scope of foreign investment in American CRE is best demonstrated with a collection of statistics.

Read on for a snapshot of international activity in the market, and the factors that are helping to drive it. They may surprise you –at the very least they are food for thought.

20%

Foreign capital is involved in twenty percent of the deals currently made on CRE in the U.S., with the heaviest investment coming from Canada, China, and Australia. Interest in international investment is surging, and pension funds around the world are looking to increase their allocation rates for real estate.

$70 billion

While figures vary, this is a reasonable estimate of the amount of foreign capital coming into CRE in the U.S. over the 12 months between July 2014 and July 2015.

By mid-year, the amount invested had already surpassed the entire amount for 2014 by nearly 100%.

10% -plus

This is the target average rate of allocation to real estate among institutional investors worldwide, according to a survey by Pensions and Investments. The study also found that Asian investors are the most likely to increase allocations, while North Americans are more cautious. The highest rates are found in Asia, where in 2014 allocations to real estate were at 10.9 percent, according to Cornell/Hodes Weill. Among European institutions they were 10 percent. U.S. institutions trailed at 9 percent.  Implementing these targets would mean more than $500 billion in new capital aimed at commercial real estate globally, in a market that some suggest may see investments of $1 trillion annually in the near future.

200%

Legislative developments play a large role in the level of international investment. One such development is the PATH (Protecting American Taxpayers from Tax Hikes) Act. This law, passed in December 2015, affects foreign investors in 2 major ways.

The law doubles the maximum amount of stock ownership that a foreign investor may have in a U.S. publicly-traded REIT from the previous limit of 5 percent to 10 percent.
 The law also permits certain foreign pension funds to invest in real estate investment trusts (REITs) without having FIRPTA tax treatment apply.

$30 billion

This is the amount of additional capital that some estimate will enter the U.S. CRE market this year as a result of changes to FIRPTA made in 2015. Many of these changes are laid out in the REI (Real Estate Investment) and JOBS (Jumpstart Our Business Startups) Act, finalized last year.

While the overall growth rate of commercial investment may moderate in 2016, favorable legislation and economic conditions in the U.S. will continue to make the CRE market attractive to international investors. Keeping an eye on the data can be key to identifying opportunities and weighing risk.

 

5 Hurdles When Purchasing Property From a Bank – REOs (and How to Bypass Them)

Particularly following the mortgage crisis of 2008, REOs have become an important segment of the real estate market and an attractive option for investors. Banks are not in business to manage property, so – in most cases – they are ready to make a deal and get foreclosed properties sold as quickly as possible.

Purchasing a bank-owned property has its own unique challenges and obstacles, but it can be well worth it to work around those. Understanding what the hurdles are is the first step in building your strategies for overcoming them.  Here are some of the hurdles that you can expect to encounter in purchasing property directly from the bank.

Hurdle #1: Dealing with a lot of competition

As we noted above, the banks are motivated to sell these properties as quickly as possible. This results in some pretty fierce competition for available deals in most markets. Actually closing the deal requires the buyer to be well prepared when the offer is made. This is can be done very efficiently when the relevant documents and property information are assembled in one place online. Otherwise, the process can be a bit time-consuming, and this may result in another buyer signing the contract first.

Hurdle #2: Higher earnest money

A traditional issue with buying property directly from the bank is that of earnest money. Most banks require a higher amount than is typically expected by private owners. The verification process that’s in place at Brevitas can help, by providing all parties with the financial details they need to make the deal happen. Transparency facilitates the process.

Hurdle #3: Proof of funds

Banks also have stricter requirements for demonstrating that you can pay for the property. This may include providing proof of funds or, in the case of a loan, submission of a preapproval letter. In the case of online platforms, it is becoming common practice to collect this information on buyers that use the site.  In this way, sharing information with a designated seller is a simple matter of granting access.

Hurdle #4: Amount of sale is public record

This can become a challenge when you are ready to sell the property in question. A purchase from a bank is more public, and the amount that’s paid for the property is available to anyone. This could be used later in negotiations in an attempt to force a price reduction.

Hurdle #5: Locating properties

It can be difficult to get reliable information on available REOs. One approach is to contact banks directly for the information, or to employ the services of an agent that specializes in bank-owned properties.

To get up to date listings for bank-owned properties, it’s often necessary to have access to broker-only sites that post that information. Some of the more accessible websites that have information about bank-owned properties can be inaccurate and may show properties that are already pending as still being for sale. This results in a lot of wasted time for the investor. Fortunately, tools like Brevitas are available, providing access to private listings in an easy to use format. The site’s transparency gives users all of the current information on a property so that decisions can be made with confidence.

The advantages of buying bank-owned properties include low down payments, great values and more. These make it worthwhile to pursue these deals, and navigate the unique challenges they entail.

How Real Estate Technology is Changing Transactions

The last decade has seen profound changes in the way we conduct the purchase and sale of property. Players in every role have access to tools that make their lives easier. Investors, property owners, agents, and lenders all utilize digital tools to boost efficiency and make more meaningful connections.

The activities of all of these groups are intertwined, and technology solutions offer benefits to each. Here’s a look at some of the most significant tech tools for our industry, and how they enhance the work of everyone in CRE.

Access to documents and data

Using technology, work can be completed without regard to location. Platforms designed specifically for CRE store relevant data and documents. For investors, these sites complete much of the time-consuming due diligence that’s critical for evaluating deals. They often include extensive market data and local trends, as well as information on the property history and the seller.

Developers and owners can share details that give a comprehensive picture of the project, collecting the information once with the option of making it available to a limitless number of prospective investors.

Instant access to this information helps speed closings. On real estate crowdfunding sites, like Fundrise, projects are often funded in a matter of a few days or weeks. At Brevitas, we streamline transactions with our thorough verification process for both buyers and sellers.

Virtual networks

CRE platforms are doing more that just bringing together buyers and sellers. Services extend throughout the industry, connecting developers with lenders and the other professionals they need to do their work. One example is Honest Buildings, which is set up to connect developers and property owners with qualified and reliable contractors. This sort of access allows for price comparisons and competitive bids.


E-signatures

Allowing contracts and other important documents to be handled entirely in digital format is becoming fairly common, and for some good reasons. The first consideration is savings, both in time and money.

When important documents can be shared electronically, they reach their destination in seconds. Compare this with printing out the finished document and putting it in the mail, and considerable time has already been saved. This is especially true when multiple signatures are required. The process of reviewing, signing, and returning the document is made much more convenient using a digital approach. This speeds up transactions.

Another consideration here is security. While some are wary of e-signing, it is actually more secure than traditional methods. Access to the document can be strictly limited, while we have less control over paper versions.

Smart Contracts with Blockchain Technology

Blockchain technology not only represents a new way to exchange funds or track payments, it also has the potential make contracts smarter. The Blockchain’s distributed ledger can track a series of events in chronological order, being able to mathematically verify these events eliminates instances of tampering or fraud.

The cryptography secure ledger can record events and create digital IDs for a multitude of scenarios. Some usage  examples of this type of ledger could be for mortgage payments, escrow, or deed transfers. To make things simple, they allow for if-then statements in contracts to be made, then demanded to be fulfilled.

Imagine if you finished paying your mortgage or you completed escrow on a new home or building. The moment those funds and conditions were met the digital contract would instantly transfer that deed ownership. Some would argue the Blockchain is the most reliable transaction record system ever created.

Mobile technology

Perhaps the technological development with the greatest impact on CRE has been mobile technology.  For agents, this has allowed them to conduct business throughout their day. Before mobile devices were developed, agents had little access to information in the field. Now they can pull up relevant data on a property, check maps for demographic information, send images and marketing content to clients, and many other critical functions using their smartphone or tablet.

Mobile technology gives buyers 24/7 access to property information. Agents and brokers can respond to inquiries rapidly, and their clients expect it. In some cases, entire transactions can now be completed on mobile devices.

As we move into an era when buying properties sight-unseen does not raise the eyebrows it once did, and international investment is growing rapidly, technology plays a central role in the industry.  It’s about access, transparency, and efficiency. This matters to anyone determined to compete in CRE.

Off Market Deal Book | February 2016

The Brevitas Off Market Deal Book provides you with a curated, varied selection of recent off market commercial real estate transactions.

  • Ping An set to invest “billions” through new US real estate arm.
    “In building up this business, our focus is very much to do things off-market and quietly, based on relationships,” Singer noted. “To do it in a way where we’re very much like a U.S. investor, as opposed to a foreign investor.”
  • LA developer Hudson Pacific sells office to YouTube for $215M
    West L.A. real estate investment trust Hudson Pacific Properties is seeing strong returns up north. The firm sold the Bayhill Office Center at 999-1111 Bayhill Drive in San Bruno to YouTube for $215 million, or $388 per square foot, in an all-cash, off-market sale that closed today.
  • Vista Industrial Buildings Get New Owners.
    Brokers said the off-market transaction combined two existing office condominiums, and the buyer will be expanding from its current operations in the 1070 La Mirada Court building. The acquired property includes an open floor plan and a warehouse.
  • San Jose’s Eastridge Mall sold in retail megadeal backed by Goldman Sachs.
    The group backed by Goldman Sachs — Pacific Retail Partners and Silverpeak Real Estate Partners — acquired the majority of the 1.4 million square foot center on San Jose’s east side, they announced on Friday. The seller was General Growth Properties. An exact price was not disclosed, but the buyers said the acquisition was worth “more than $200 million” and was completed off-market.
  • “We are constantly looking for off-market opportunities,” deals that aren’t widely marketed, said Fred Hamm
    Investors who’ve spent more than $10 million to redo downtown Dallas’ Plaza of the Americas hope that the office tower and retail complex will now attract a buyer. The Plaza of the Americas and the nearby Ross Tower are the two biggest properties for sale this year in North Texas.
  • Siegel Group Nevada buys Rodeway Inn for $6.1M.
    The Siegel Group Nevada bought the Rodeway Inn Convention Center Hotel at 220 Convention Center Drive for $6.1 million. The purchase was an off-market deal that closed in 30 days, the company said.

7 Dream Team Players You Need Before Investing in Real Estate

Getting started investing in CRE requires a good deal of preparation and planning. One of the first considerations is forming a team, because this is not something one does alone. You’ll need experts in your corner to navigate this complex environment.

Technology developments have expanded our options and given us unprecedented access to experts and networks. Making use of these tools, investors can cover all of the bases much more efficiently and assemble a dream team.

#1: Property Comps

Access to information on comparable properties is essential in evaluating a potential investment and formulating an offer. While this information was once the domain of agents and brokers, it’s now available online. Several excellent platforms offer comps for commercial real estate.  Compstak is a free source with thousands of comps shared by its users. It is searchable and accurate, so any investor can get the information they need.  Loopnet offers listings and property records, as well as sales comps, for a subscription.

#2: Market Analysis

Understanding market conditions and forecasts is the basis for effective planning. Here again, technology has opened the gate to this information. Data aggregators compile massive amounts of information and analyze trends to develop an accurate picture of current conditions as well as credible forecasts for future growth. There are an array of online services that make Big Data into a manageable tool. Some examples are REIS,  Real Capital Analytics, and Costar.

#3: Accountant

There’s a lot of number crunching involved in CRE investment, so an experienced accountant is a huge asset. A CPA can help you to maximize tax savings and avoid over-extending yourself.  Ask other investors for recommendations, and keep in mind that an accountant that has participated in investing can take your perspective.

#4: Portfolio Management Software

Once investments have been identified and accumulated, tech tools will help you to manage them effectively. Platforms for managing portfolios are sophisticated and intuitive aids. Reoptimizer provides a comprehensive dashboard that lets you get a clear overall picture of your investments and reports and calendar features that help keep you on top of the details.  Argus includes tools for budgeting, risk management, and analyses that help build your portfolio strategy.

Property management

The complexities of property management can be tamed by digital tools created specifically for CRE.  These platforms assist with everything from rent collection to marketing, and can serve small operations as well as large property management firms.

#5: Listings

Access to listings has never been so widespread. In fact, potential buyers often identify properties and then consult brokers for access to the details. The array of portals for CRE is vast, and many platforms are able to provide in depth property information online to interested buyers. Costar’s showcase site is a search engine for commercial properties, and CRBE’s site shares listings for properties worldwide.

Even so-called “off-market” deals, once known only to industry insiders, can now be searched online. One such private marketplace is Brevitas, which in a few short years has compiled a huge inventory of these opportunities.

#6: Attorney

An attorney is essential for navigating the investment process. This is a complex environment, so choose an attorney that spends the majority of his/her time (at least 60%) on real estate, and has at least 5 years’ experience in real estate law.  Their clients should include many investors, in a variety of CRE properties. An attorney that has made some real estate investments of his/her own will also be in a better position to represent investors, in many cases.

#7: Brokerages

Real estate brokerages have seen their roles evolve over the last decade. As clients are empowered by technology, they’re able to find preliminary information independently. The brokerage has become an expert consultant, providing clients with detailed information on market trends, economic and demographic factors, and the ins and outs of transactions.  Major brokerage houses share a wealth of information online. Check the sites of JLL, CBRE, Marcus & Millichap, and others for useful statistics, news, and information. They provide a tremendous range of services relating to CRE.

Assembling an investment team is easier than ever, and these resources mean that your team can include some nationally ranked players.

2 Solid Reasons You Should Use a Confidentiality Agreement

There are elements of a traditional real estate deal that are optional. You may choose from a variety of approaches to funding a transaction or securing appropriate management, but one thing that should be part of any CRE transaction is the confidentiality agreement.

This document, also called a non-disclosure agreement, can be either unilateral (one party must keep information confidential) or mutual. It’s designed to protect both parties from harm that can result from sharing sensitive information that comes to light during negotiations. This is a precautionary step; it addresses situations that could possibly occur in the future.

For this reason, someone with little experience in CRE might not see the need for a confidentiality agreement. In that case, it’s advisable to rely on the wisdom of those who’ve come before, and have seen the many twist and turns that information takes in the marketplace. Without the protection of this kind, others in the industry can use their knowledge of your financial arrangements, details on property ownership, and strategic information relating to your property to gain an advantage.

For real estate, a confidentiality agreement generally consists of 5 sections:

  • description of the confidential information
  • items that are to be excluded from the confidential information
  • obligations of the receiving party
  • time limitations
  • miscellaneous provisions

Confidentiality can be a valuable commodity in CRE. Here are 2 solid reasons to incorporate these agreements into any transaction.

Reason #1: Prevent exposure of sensitive information

This type of agreement is often used when one or both parties wish to remain anonymous. It’s common in the case of high-profile buyers or sellers. The agreement prevents the general public or competitors from learning sensitive details about a company or individual. It helps them to keep their future plans, like marketing strategies or development plans, private.

Reason #2: Minimize “shopping the offer”

Especially when inventory is low and demand is high, a property that’s well-priced will likely receive multiple offers.  In this situation, the listing agent may inform the agents of other prospective buyers of some of the details of an existing offer, hoping to get a better offer. The information that is disclosed by the listing agent varies, but in addition to the price offered, it may include the down payment amount or escrow stipulations. In any event, giving the competition access to these figures puts the buyer at a disadvantage.  This is perfectly legal, so long as it is done with the seller’s permission, and can be avoided if a confidentiality agreement is signed.

As with any legal document, confidentiality agreements should be carefully examined. Violating this agreement is a breach of contract, and can result in a lawsuit.  There can be severe penalties for this, so it’s advisable to have an attorney look the document over. Some agreements are more restrictive than others. Terms can be negotiated, so don’t sign an agreement that you can’t live up to, but do make it a part of the transaction.

4 Ways to Simplify the Real Estate Disposition Process

For a variety of reasons, owners and developers often find themselves in need of a quick and uncomplicated disposition for commercial property. This can be a tall order, but there are ways to make the process simpler and hasten its completion. Below we discuss some considerations that will be involved in getting the best price for a property while still meeting any existing time constraints.

Debt

If the property has existing debt, the seller should consider whether it can be assumed. If not, it may be possible to restructure the debt or to pay it off at a discount before the property is sold.

Best use of the property

When marketing this property, the seller should think about whether the current use being made of the property is its best (most profitable) possible use. If not, it might make sense to make some changes or even redevelop the property to raise its value before selling.

Marketing

An important factor in how well a property sells is how many people are reached with the news that it’s available. Technology makes it easy to make contact with thousands of potential buyers –through listing sites as well as through professional networks and social media.

Real estate brokers now provide extensive property information online, and customers are coming to expect it. Listing a property for disposition should involve as much in depth information as possible, to assist buyers in determining whether it’s for them. Sites include market information and trends to provide a clear picture of where the listing fits.  Platforms have recently developed that provide private listings for registered users, so even so-called “off-market” deals are now online.

Vetting buyers

Even if thousands of buyers have access to information on the property, its disposition is only helped if they are qualified. Verifying the ability of prospective buyers to complete the deal is critical, and can often consume a great deal of time which could lead to a dead end. Hiring a professional can help make this process more accurate, as they will use established industry connections to gather the necessary information on buyers quickly.

Working with a pool of buyers that has already been checked and verified can cut weeks off of the time required for disposition, and that’s possible on some investment platforms. In order to participate in deals on Brevitas, for example, buyers create a profile and provide proof of funds along with a government ID.

With that information covered at the outset, deals can move forward more quickly.

Commercial property disposition can be the solution to a range of difficulties, or just a step whose time has come. Either way, simplifying the process can save the seller considerable time, money, and aggravation. CRE is making use of technology to facilitate this type of activity, making the whole process more transparent and less time-consuming. Knowing about the tools that are out there can give buyers a tremendous advantage and smooth the road to a successful outcome.

6 CRE Technologies of the Last Decade that Changed the Industry

It may have taken a while, but the CRE industry has begun to exploit the possibilities of technology, working more efficiently and with a more informed position than ever before.

Tech startups have turned their talents to CRE Tech in a big way over the last several years, and there are platforms and apps to address every aspect of the business. Venture capitalists have poured millions into companies developing tools to solve problems and increase efficiency in investment, property management, marketing, and the due diligence process.

As the expectations of our customers change, it’s become mandatory to incorporate technology into CRE wherever possible. It increases reach, speeds routine procedures, and ultimately improves service and performance overall. Some innovations stand out as particularly useful, and we discuss these below.

#1: Crowdfunding

Crowdfunding allows a wider pool of investors to participate in CRE investment by sharing listings on platforms designed to make transactions more accessible, transparent, and secure.

Crowdfunding started as a way to raise funds for charity, and gradually came into use by individuals. With the 2012 passage of the JOBS (Jumpstart Our Business Startups) Act, an opportunity appeared for changing real estate investment profoundly.  Through crowdfunding, investors can purchase debt and equity through more than 80 sites in the U.S., and the number continues to grow.

Many real estate crowdfunding platforms provide extensive information to help investors in evaluating offerings, vetting developers, and making connections. Some sites limit participation to accredited investors (those with an income over 200,000 or an net worth of $1 million+), but others can work with unaccredited investors, and minimum investments of $100.

The system benefits developers as well, since crowdfunding is ideal for funding smaller (under $25 million) projects that might not attract attention from large institutional investors. Such projects might take years to fund, or be dropped when funding did not materialize, but with crowdfunding worthy projects are routinely funded in a matter of days.

#2: Cloud Computing

The ability to store and share documents online has been causing a quiet revolution in CRE. Through practices like e-signing, these sites are eliminating the need for many fees and middlemen that were once necessary to complete transactions.

Managing documents in the cloud also gives our ability to collaborate a work in teams a big boost. Most of the things we do in CRE involve a collection of individuals working to get the job done, and using the Cloud means that each team member has access to the most current version of all the pertinent documents. No tracking them down. No calling around.  This is big.

#3: Mapping

This is a critical source of information for CRE, and digital mapping software gives us tremendous flexibility and control over the information our maps present.  Mapping applications can combine different types of data, and are interactive, meaning that the user can manipulate the data to make their own comparisons and get a graphic representation of different scenarios.

This type of tool helps brokers to more efficiently track trends and evaluate market potential. They can then present relevant information to their clients in a usable, compelling way. Firms can even integrate their listings with GoogleMaps and other search engine maps.

Mapping software offers customization options, letting the user set parameters and incorporate proprietary data. This makes the images and information meaningful and communicates trends and relationships in a way that a table of figures just can’t.

#4: 3D Technology

The ability to “see” a property from every angle, in a realistic 3D tour, has huge implications for investors, developers, and brokers who increasingly work in multiple markets.  The use of 3D video tours and virtual models make remote work much more practical, and can communicate ideas extremely effectively.  Services like Floored are taking listings to a whole new level.

#5: Sensors

Sensors are monitors that keep track of an array of situations, constantly logging information that can later be viewed in reports. Some of the most useful to CRE include monitors that provide pedestrian and traffic counts, as well as “smart” technology that keeps track of building systems and monitors conditions to avert potentially costly problems like water leaks.

Data from these devices can be gathered around the clock, and customers have access to informative, real-time reports. In the retail sector pedestrian counts supply valuable information, showing patterns over time. They can reveal not only the times of heaviest traffic, but even where most of the passersby are coming from. These are tremendous tools for evaluating potential investments and for scheduling and planning, and most are extremely affordable.

#6: Drones

A technology that helps to create a more complete picture of any listing, drones used for aerial photography have been an exciting development for CRE. They allow us to provide a bird’s eye view of properties, showing the exterior as well as the surrounding neighborhood. Buyers can check out details like the availability of parking, the amount of traffic, and other important factors.

Although the FAA is still grappling with how to regulate them, drones are becoming more and more common and inexpensive. They have tremendous potential for CRE.

4 Multi-Family Trends Likely to Continue in 2016

It’s been a good year for the multi-family market in the U.S., and some favorable trends we’ve seen in recent months will likely continue as we move further into 2016. Experts are saying that high demand will continue to keep vacancies low, and the steady climb in rents will also stay with us, although some markets will be stronger there than others. Here’s a look at the 4 big multi-family trends that have plenty of momentum to carry them through the coming year.

#1: Demand from the millennials

Perhaps the factor with the most impact on the multi-family market has been the rise of the millennial generation to take its place as the most numerous demographic in the U.S.  This group, born between 1980 and 2000, now outnumbers the baby boomers, and makes up more than one-third of the country’s total population. What does that have to do with multi-family properties? Plenty.

As a group, millennials are showing a marked preference for renting over home ownership. Part of this is related to the challenging economic climate, as well as the student loan debt that many in this age group are carrying. These factors, combined with stricter mortgage loan policies, lead millennials to postpone buying a home. In fact, the rate of home ownership for Americans 35 and younger is at a historically low point: just over 36%.

This demographic is also fond of the flexibility and convenience of renting. The need to relocate may arise, and many millennials would prefer to avoid the task of selling a home in order to move. They also appreciate the perks that come with apartment living, like clubhouses, pools, gyms, and other amenities. Millennials favor urban locations fueling the trend toward living and working in urban centers, as opposed to less densely populated suburbs.

#2: New Multi-Family development

As demand holds steady, the market responds with new units, and despite the fact that construction is brisk, the inventory is still not meeting demand in most markets. The cities where increased inventory could possibly slow rent growth in 2016 include Charlotte, Albuquerque, and Los Angeles.

The most active markets for new Multi-family development have been in Phoenix, Dallas, Miami, Atlanta, and Charlotte. This will likely shift in 2016, with those places nearing optimum inventory dropping off while others, like South Florida, Seattle, and suburban Atlanta, surge ahead.

#3: Rising rents

In 2014, rents grew at a rate of 5.9% nationwide, and this year there were increases of as much as 9% in some areas of the U.S. This was especially true in secondary markets like Denver, San Francisco, and Portland. The weakest growth is expected in Washington DC. Still, the overall demand for units continues high in most markets, so the outlook is for continued rent growth going forward.

#4: Growth follows tech jobs

If the experts are right, the demand for new and existing multi-family units will be highest in the places where strong job growth is attracting new residents. This seems logical, and the type of jobs matters. Growth in well-paid jobs pulls in new residents and potential multi-family tenants.

Moving into 2016, the employment sector with the highest growth will continue to be in the technology fields. San Francisco, Seattle, and places like Denver and Austin will continue to attract a substantial number of well-paid workers in the tech sector who are likely to choose multi-family housing. Raleigh, NC’s Research Triangle is another area of strong technology job growth as is Houston, which remains one of the country’s fastest-growing cities, and is becoming a hub for healthcare and related technology.