Foreign Investment in Exceeds Pre-Pandemic Levels; Multifamily Market Stays in Demand: January Multifamily News Roundup

The Biggest January 2022 Real Estate News 

We have summarized the biggest multifamily real estate from January of 2022. Foreign investors have once again begun putting their money into the American real estate market, especially into multifamily assets, and rents continue to rise across the country. 

Foreign Investors Focus on U.S. Rental Market

As the country emerges from the COVID-19 pandemic and markets continue to adapt, foreign investors have their eyes on American real estate  once again. In a recent report conducted by the data firm Real Capital Analytics, pensions, sovereign wealth funds, and other foreign institutions purchased $70.8 billion of commercial real estate in 2021, nearly double the 2020 figure. 

More investors from Canada, Singapore, South Korea, and elsewhere continue to drive the frenzy. While office and hospitality assets were typical targets for foreign investors before the pandemic, reports suggest that overseas buyers now account for about 34% and 30% of industrial and apartment asset acquisitions. 

In addition, these investors have greater interest in non-major markets of the United States – especially those in Sunbelt states. A record 64% of foreign investment was in non-metropolitan areas, pushing Manhattan to the number three spot, behind Boston and Atlanta. 

Multifamily Rent Gains Continue 

As the average price for a single-family home continues to rise across the country, it’s no secret that the multifamily-housing market is red hot. According to the latest Yardi Matrix Multifamily National Report, multifamily rent prices continued to increase in January as they were up $8 and reached a country-wide average of $1,604. The year-over-year increase was 13.9%.

In six of the top 31 metros, asking rent growth increased year over year by 20% or more, with Tampa, Florida, and Phoenix at the top of the list, followed by Florida markets, Orlando and Miami, Texas’ Austin, and Las Vegas. In addition, rates were up by 10% or more in almost 90% of the top 31 metros.

Student-Housing Acquisitions 

Although college enrollment saw a slight decrease at the top of this year, student housing rentals are making a roaring comeback as 2022 currently has the highest percentage of beds pre-leased through this time of the year of any year covered. 

According to Yardi’s recent Student Housing report, the average rent per bedroom was $791 as of December, a 2.2% increase over the previous year and 0.3% over the previous month. That figure marks the highest average rent for off-campus dedicated student housing since the onset of the pandemic. Most notably, the University of California-Riverside reported annual rent growth above 15% and average monthly rent per bedroom at $1,004 as of December.

Other top markets include the University of Nevada, Las Vegas with 14.5 percent rent growth and 57.6 percent of bedrooms pre-leased, the University of South Florida with 13.0 percent rent growth and 26.6 percent of bedrooms pre-leased, and Georgia Institute of Technology with 11.3 percent rent growth and 16.8 percent of bedrooms pre-leased. 

Investors, both foreign and domestic, have capitalized on this opportunity as student housing acquisitions continue to rise beyond post-pandemic rates. Some of the most recent transactions include Champion Real Estate Co selling Victory on Ellendale in Los Angeles for $20.5 million and Ruegg & Ellsworth selling a 0.3-acre site in Berkley for $21.5 million

Other Stories  

  • With the housing market all across the country becoming more unattainable for first-time homeowners and rents continuing to skyrocket, rent-to-buy opportunities are increasingly becoming more popular. 

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