Please move to our suburban apartment building
Multifamily building owners in the suburbs are having to offer steep discounts on market rents to maintain occupancy, while urban properties are filling up much more easily, according to the National Real Estate Investor. "The commercial real estate industry is noticing a dichotomy between property fundamentals for commercial buildings in Central Business Districts (CBDs) and those in the suburbs," according to the report. "Rent growth for multifamily projects located in CBDs has outpaced rent growth for suburban projects by 3 percentage points, according to the CoStar Group, a Washington, D.C.–based research firm. Today, occupancy at CBD-based multifamily buildings averages a full percentage point higher than in the suburbs. Similarly, in the third quarter of 2012, average rents for office buildings in CBDs nationwide stood at $30.10 per sq. ft.—a premium of more than $10 per sq. ft. over suburban office buildings. Vacancy at CBD office properties was also lower, at 0.1 percent, compared to 0.12 percent for suburban assets." For commercial real estate investors and developers today, the decision to build in cities is a no-brainer, NREI says.
For more in-depth coverage:
• Subscribe to Better! Cities & Towns to read all of the articles (print+online) on implementation of greener, stronger, cities and towns.
• Get the October-November 2012 issue. Topics: Guiding investment to urban centers, Florida next gen project with streetcar, Town centers, Upstate NY downtowns, Transformation of a small town, New Moscow district, Community engagement, Walkable City, Human Transit, Freeways Without Futures, Beruit
• Get New Urbanism: Best Practices Guide, packed with more than 800 informative photos, plans, tables, and other illustrations, this book is the best single guide to implementing better cities and towns.