High demand keeps ABQ’s apartment rental market hot
Low vacancy rates tick up prices, fuel modest construction
Apartments in Albuquerque are in high demand as occupancy rates remain strong and rent continues to climb. The average rent price, which includes both market-rate and affordable units, nudged up by 3.3 percent over the year, from $789 to $815, with all units types showing gains, according to the latest market survey from the Multifamily Housing Team at commercial real estate services firm CBRE.
The survey says the average market-rate a apartment unit was $834 month
in May. The firm’s Albuquerque office collected data on 149 market rate apartment complexes and 46 affordable properties, which usually have income limits.
The Albuquerque apartment market, called one of the most resilient in the nation, showed that May occupancy of 95.7 percent increased from 95.3 percent the prior year, which means most units are full, and apartment complexes aren’t struggling to find renters. Indeed, of all the properties in the metro area surveyed, 77 percent have a 95 to 100 percent occupancy rate, compared to the 68 percent posted last May.
Apartment occupancy took a small hit in 2009, dropping to a low of 91 percent in CBRE’s January survey of that year, as the Great Recession took its toll on the economy. The apartment market bounced back, and the metro area occupancy rate hasn’t dropped below 93 percent since then.
While the rent rises in Albuquerque may not be welcomed by residents, the city isn’t seeing the kinds of double-digit prices in cities where the economies and job growth are more robust and the cost of living is higher. Rents soared in Austin nearly 8 percent in the most recent year, while rents in Seattle have climbed 57 percent in the last six years, costing the average renter an extra $635 per month, according to Capitol Market Research.
In terms of the supply pipeline, the Albuquerque market remains unchanged from CBRE’s January survey. An estimated 850 marketrate units are expected to be delivered between 2017 and 2019, and about 200 affordable units will hit the market over the next 12 months.
Helping to meet demand, but decidedly on the high-end side, will be the Markana and Broadstone Northpoint projects in northeast Albuquerque.
The 232-unit Markana will be a highly amenitized complex offering one-, two- and three-bedroom units ranging in size from 807 to 1,307 square feet. The pet-friendly complex will feature “well-designed, spacious floor plans with high-end finishes, simple elegance, clean lines and sophisticated styling,” with rents ranging from $1,100 to $1,450.
Northpoint, a 226-unit infill community north of Alameda, on Modesto NE between San Mateo and I-25, broke ground in November 2016 and will be completed in early 2018.