Downtowns around the nation are witnessing a boom in high-rise apartment construction. This year, at least 74 rental towers are on pace to be completed, with 81 more on the books for 2015 — the highest number since the 1970s, reports Axiometrics. An apartment tower is defined as 15 stories or more. Meanwhile, strong apartment rents coupled with sluggish demand for office space has resulted in some high-rise buildings being converted to rental apartments. Overall, the growth has been greatest in denser, pricier markets such as Chicago, New York, and San Francisco. However, in percentage terms, the increase has been most dramatic in such smaller cities as Austin and Minneapolis, which is building apartments at the fastest pace in decades. For its part, Houston has eight apartment towers on track to finished this year and in 2015 versus just a half-dozen from 2005 to 2012. Mark Humphreys, CEO of Humphreys & Partners Architects, observes, “It’s the ‘Manhattanization’ of America and it’s happening in cities that never had rental high rises.” The growth in new rental towers, most of which are woven into downtown office centers, is primarily being driven by young professionals beginning their careers and empty nesters who are downsizing from larger homes in the suburbs. Together, these two demographic groups are helping downtowns evolve from places centered mostly on workplaces and entertainment venues to more complete neighborhoods that feature everything from supermarkets to community centers to community services. Rents are even setting new records. Despite the new supply, Minneapolis’ downtown rents climbed 9 percent in 2013. Meanwhile, the vacancy rate was 4 percent as of Dec. 31, notes Marquette Advisors — an increase from 1.9 percent the year before. But the city added close to 1,000 rental units over the year. The apartment boom has helped to offset a weak market for high-rise office development. Of course, the risk for developers there and in other similar markets is that they overdo it, building too may apartments and causing rents to decrease. – See more at: http://www.naahq.org/read/industry-insider/04-29-2014#720599
High-Rises Living Boom in Downtown Orlando & Nationwide
