ST. LOUIS, Jan. 21, 2008 — Apartment demand in St. Louis will continue to be strongest in the major white-collar job districts and adjacent submarkets this year, leading to pronounced vacancy and revenue improvements in these areas, according to the 2008 National Apartment Report by Marcus & Millichap, the nation’s largest real estate investment services firm. Nearly all of the metro’s apartment construction will occur within the new remaining sites of the Golden Triangle, an area bounded by Interstate 70, Highway 40 and the Missouri River.
“Investment activity in St. Louis will remain steady this year as increased out-of-state buyer activity offset some of the condo conversion transactions that have faded from the market,” says Jeffrey R. Algatt, regional manager of the St. Louis office of Marcus & Millichap.
Following are some of the most significant aspects of the St. Louis Apartment Research Report:
Employers will add 9,500 jobs in 2008, an increase of 0.7 percent.
Approximately 600 apartments will come online in St. Louis this year.
The vacancy rate is expected to improve 10 basis points to 6.8 percent in 2008, following at 110 basis point drop last year.
Asking rents are forecast to rise 2.8 percent to $736 per month, while effective rents advance 3 percent to $697 per month.
Local investors with extended holding periods may want to target Class B/C assets in the Airport/Interstate 70 and East of Interstate 44 submarkets.
Also included in the report is the firm’s annual National Apartment Index (NAI), a snapshot analysis that ranks 43 apartment markets based on a series of 12-month forward-looking supply and demand indicators. St. Louis is new to the NAI ranking.
In the 2008 NAI, San Francisco moved up seven places to take over the top spot, surpassing last year’s leader, New York City, which slipped to No. 3. Seattle moved up five places to the No. 2 spot. San Jose climbed eight positions to the No. 4 slot. Oakland holds the No. 5 position, down two places from last year.
For a copy of Marcus & Millichap’s National Apartment Report and the complete NAI rankings, visit www.MarcusMillichap.com.
With more than 1,300 investment professionals in offices nationwide, Encino, Calif.-based Marcus & Millichap Real Estate Investment Services is the largest commercial real estate brokerage in the nation focusing exclusively on real estate investments. In 2006, the firm closed $20.5 billion in transactions. Founded in 1971, the firm has perfected a powerful system for marketing properties that combines product specialization; local market expertise; the industry’s most comprehensive research and analysis capabilities; state-of-the-art technology; and established relationships with the largest pool of qualified investors nationally.