Bob - Walt, the apartment market appears to be the strongest sector of commercial real estate, can you give us an update on what’s happening in the apartment market?
Walt - Good morning Bob. One of the things that stand out in the apartment market is the move away from the major markets. Secondary markets posted a 38% year over year increase in transaction volume and tertiary markets, like Albuquerque, had a 23% year over year increase. So the money is starting to flow from the major markets into smaller markets for one primary reason and that is investors are able to achieve a better yield on the properties in the smaller markets.
Another sign of the strength in the apartment market is developers purchasing apartment sites. Nationally, multifamily construction increased 45% year-over-year and developers have acquired more than $2 billion in multifamily development sites, that’s double the volume for all of 2011.
Bob - How are those national numbers translating to the Albuquerque market, are we seeing any development here in the apartment sector?
Walt - Titan development recently broke ground on the first phase of multifamily development project totaling more than 460 units in Albuquerque just north of San Antonio East of I 25.
And Titan has six more development projects in the queue so we are seeing some strength in the Albuquerque market on the development side.
Bob - Walt, with all these new projects being developed what are some of the changes being made in new apartment projects? What the younger generation looking for in an apartment?
Walt - Generation Y is basically looking for smaller, connected spaces in urban locations. They travel light and don’t collect a lot of stuff. And they’re also looking for smaller personal space and larger communal space.
And apartment owners are listening because are adding more outlets with built-in USB charger ports in kitchens and bedrooms, creating more open spaces, using cool color patterns to attract more tenants, and tenants are using their smart phones to find out what amenities are located in the area.
So generation Y is having an impact on construction of new apartments, both from the fact that younger people like the apartment life because it provides them the flexibility that they require and generation Y is also having an impact on the way developers are constructing new apartment units.
Bob - How can people get a hold of you to talk about commercial real estate?
Walt - Thanks Bob, give me a call, Walt Arnold, Sperry Van Ness, 256-1255, our website is walt.arnold.com. If you have any questions regarding commercial real estate, let’s talk. Bob thanks for the time today and I’ll talk to next week.