What the future holds for multifamily housing, Omaha.
Published on: Monday, February 13th, 2017
Freddie Mac reports on the status of multifamily dwellings each year. 2016 enjoyed a lot of growth in the number of new units brought to market although there are signs it’s cooling.
So we aren’t much in the new development realm, but that isn’t to say it doesn’t affect us to some extent. The past year has shown signs of developers looking for repositioning opportunities. That is, outlaying enough capital to change the quality of a property from “C” class to “B” class, or up to “A” class even. Specifically my take in this Omaha market is that buildings that are in decent parts of town or that are close to important institutions (Creighton, UNMC, Midtown Crossings) may be in a position to be acquired and transformed. Problems is…there are not a lot of those buildings.
To make it a little more difficult developers may be picking up on the possibility that the “A” class market is getting ahead of itself, as in plenty of inventory and maybe a shrinking demand. This would push the rental rates down far enough that “A” class won’t be financially viable.
My guess is that the new play in this market will be converting C class properties to B class. Less capital outlay, less risk (maybe) and plenty of gain. The demand for B is importantly poised to increase too as staffing for these new midtown developments becomes more and more necessary. I mean, whose going to commute from West Omaha to wait tables in the hard of our fair city? B class is where it’s going…I’ll betcha.