JF3464: Rents Are Cooling, but Not Everywhere: How Class A ‘Luxury’ Supply Is Putting Pressure on Class C Rents ft. Jay Parsons

Welcome to the Best Ever midweek news brief, a new series where we will highlight the top headlines CRE investors should be paying attention to this week, followed by a deep dive on a larger news topic or trend alongside a CRE expert.

Today’s Headlines:

• Self-Storage Boom Set to Peak: A recent report from Yardi Matrix predicts a surge in supply for 2024 and 25, followed by a decline in later years, signaling a major shift in what’s become an attractive asset class for investors.
  
  

• ‘Cause for Optimism’ in NNN?: Triple-net-lease average closing cap rates declined in January while inventory dropped for a second consecutive month, to signs that Chris Lomuto of Northmarq says could be “cause for optimism.”
  
  

• Rents Are Cooling … Sort of: New “luxury” Class A supply is putting downward pressure on rents at all price points. It’s a phenomenon called “filtering,” and there are 12 U.S. markets where Class C rents are falling at least 6% year-over-year. All 12 of those markets have supply expansion rates ABOVE the U.S. average.

 

Today’s Guest: Joining host Paul Mueller on the Best Ever Show today is Jay Parsons. Jay is Head of Economics and Industry Principals at RealPage. As a rental housing economist, Jay is one of the leading voices in multifamily real estate. He’s an author, speaker, and an expert in market trends and forecasts, rental housing policy issues, property management, and more. If you want to read more from Jay on this story, he’s posted on Twitter and LinkedIn about it recently. You can also follow him on LinkedIn and on Twitter @JayParsons.

 

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