Millennials head west for housing, and institutional investors follow

The Mountain States have seen a dramatic rise in apartment building rental income, as bigger real estate firms push into an area once dominated by smaller companies.

National /
Nov.November 29, 2019 11:00 AM
The Mountain States saw the fastest home-price growth of any region (Credit: iStock)

The Mountain States saw the fastest home-price growth of any region (Credit: iStock)

Millennials in search of more affordable digs are heading west, swapping Brooklyn for Boulder. And institutional investors are taking the hint.

Apartment building rental income nearly doubled between 2004 and 2018 in the eight Mountain States, according to a report from Trepp that examined properties in eight states, as cited in the Wall Street Journal. Net operating income grew by 7.33 percent in 2018 in those states of Arizona, Colorado, Idaho, Montana, New Mexico, Nevada, Utah and Wyoming.

The growth rate outstrips any other region in the country, as millennials hunt for cheaper housing, lower taxes and an escape from the city, according to the report.

The growth in a sector that until recently has been dominated by smaller firms has caught the attention of institutional investors. Kennedy Wilson, a publicly-traded real estate investment firm, made its first buy in Salt Lake City in 2012. Since then, it has grown its apartment portfolio to nearly 8,000 units, the Journal reported.

The Mountain States also saw the fastest home-price growth of any region between June 2018 and June 2019, according to the latest quarterly data from the Federal Housing Finance Agency.

The nationwide housing shortage also means people are willing to rent. A March study by the National Low Income Housing Coalition found Idaho had just 48 affordable units for every 100 extremely low-income households. [WSJ] — Georgia Kromrei


Related Articles

arrow_forward_ios
From mid-March to the end of 2020, only 11,690 units citywide were affordable to essential workers (iStock)
Affordable, market-rate apartments surge 40%, but remain rare
Affordable, market-rate apartments surge 40%, but remain rare
(iStock)
South Florida hits record $5B in residential sales volume in December
South Florida hits record $5B in residential sales volume in December
The average price of a London home rose above 500,000 pounds, or roughly $685,000, for the first time. (Getty)
London home prices hit new high
London home prices hit new high
(iStock)
Home prices hit fastest growth in six years
Home prices hit fastest growth in six years
Residential sales surged in November (Getty)
South Florida home sales soar in November, led by luxury properties
South Florida home sales soar in November, led by luxury properties
From top: Park Place Mall in Tucson, AZ with Brookfield Property Partners CEO Brian Kingston; Westfield Countryside in Clearwater, FL with Unibail-Rodamco-Westfield CEO Christophe Cuvillier; and The Mall at Tuttle Crossing in Dublin, OH with Simon Property Group CEO David Simon (Google Maps, Westfield, Simon, Getty)
These are the biggest malls landlords ready to hand over to CMBS lenders
These are the biggest malls landlords ready to hand over to CMBS lenders
(Getty)
These are the 10 priciest ZIP codes in the US
These are the 10 priciest ZIP codes in the US
(Getty, iStock)
Cash-strapped borrowers are increasingly giving keys back to lenders
Cash-strapped borrowers are increasingly giving keys back to lenders
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...