By Dan Rafter
Renters and investors are still seeking out multifamily space. And the demand for apartment living is showing no signs of slowing, according to Kia Crooms, area vice president of the Midwestern region for King of Prussia, Pennsylvania-based Morgan Properties.
We spoke with Crooms about the enduring strength of the multifamily market and why Morgan Properties is eager to expand its apartment holdings in the Midwest. Here is what she had to say.
Why has demand remained so strong for multifamily properties for so long? What are the factors fueling the long hot streak of this asset class?
Kia Crooms: The economy has certainly helped. There has been excellent job growth in the United States. Wages for individuals continue to rise. People have access to cash. At the same time, the supply chain issues persist. That makes it difficult to build as many new homes as people want. Renting, then, is a great option for people today.
Housing prices are high, too. That is inspiring more people to rent. We are seeing an excellent retention ratio when it comes to lease renewals. Folks are even selling their homes, taking out the cash and downsizing to apartments and townhomes. They want the lifestyle and the lack of maintenance that comes with renting instead of owning.
What about rising interest rates? What impact is that having on the number of people who want to rent instead of buy?
Crooms: When interest rates are higher, people are more likely to rent. But our investors are still excited about multifamily properties, too. Our investors continue to be excited about different markets, especially when it comes to the Midwest. There are many markets in the Midwest that are always strong.
Morgan Properties has made several recent multifamily acquisitions. We entered the Indianapolis market with a property of more than 2,100 units. We have also recently entered the Chicago suburbs with purchases in Elgin, Palatine and Schaumburg. We continue to find ways to build our portfolio.
Why make the move to Indianapolis? What attracted you to this market?
Crooms: As an organization, we are oversaturated with properties in the East Coast and Sunbelt regions. Indianapolis was an untapped market for us. We like the growth potential in the Indianapolis area. There are some good meat-and-potatoes properties there when it comes to Class-B assets. There is a Class-B market there that is untapped and in our wheelhouse. We do that section of the market well. We like to buy those properties and add value to them.
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