Still Room to Run for Multifamily, Despite Prolonged Cycle

■ Although the recovery is starting to show signs of strain and market players are increasingly gaming out downside scenarios, 2019 should be another good year for the multifamily industry. Demand is expected to stay healthy as long as job growth remains positive and young adults and retirees choose apartments.

■ The economy is showing signs of strain and stock market volatility demonstrates heightened concern about the economy among investors, but job growth and consumer spending are likely to remain healthy. GDP might not approach 3% again, but neither do we see it slowing below 2%.

■ We foresee another year of moderate rent increases in the 2.5% to 3.0% range nationally, led by metros in the South and West with strong in-migration and job growth. Some of the greatest gains will come from fast-growing tertiary markets such as Tacoma, Colorado Springs and Reno. New York City rents will be relatively flat again, but no metro will see negative growth.

■ We expect roughly 300,000 deliveries nationally in 2019, the fourth straight year at that level. Although rents will be tested in some metros by a spate of deliveries, recent experience has shown that supply will be absorbed when demand is there.

■ Investors just can’t quit commercial real estate. As the economic cycle ages, investors are increasing allocations to safer asset types, which means a larger portion of CRE dollars moving into multifamily and industrial

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