As featured in the Cincinnati Business Courier, Flaherty & Collins Properties is part of an apartment boom taking place in Cincinnati.
Flaherty & Collins Properties is getting ready to break ground on a 150-unit expansion at its The Boulevard at Oakley Station community. It’s also working to build a $70 million, more than 200-unit apartment tower at the northwest corner of Fourth and Race streets.
The projects are part of a trend in the Cincinnati region: in-fill developments in established neighborhoods, part of larger mixed-use developments or connected to an area’s main amenities, whether it’s a shopping center, bars and restaurants, or bike paths and rivers.
The Greater Cincinnati area is expected to add more than 20,000 jobs per year for the next three years, according to data from CBRE Econometric Advisors. The Cincinnati metropolitan statistical area is expected to see its total population grow by more than 1.5 percent by 2020. Plus, millennials are finally coming to the apartment market.
After spending time out of college either at home with their parents or renting with other friends, millennials have the jobs and income to get their own places. But millennials aren’t choosing to buy for a couple of reasons. One, they want to be mobile. Two, they grew up watching their parents get hammered by the housing bubble bursting in 2007.
The region also posted strong numbers for occupancy rates and rent growth.
Overall occupancy rose to 94.2 percent last year, the sixth straight year of gains. And between 2012 and 2015, average rent climbed more than 13 percent to $844 per month from $746 per month. The biggest increase came last year, when average rents jumped 5 percent. That’s ahead of the national average increase of 4.7 percent last year but outside of the top 25 markets for rental growth.
And finally, there just haven’t been many apartments built in Cincinnati in the last two decades.
The five-year average for apartments built is 1,074. The 10-year average is even lower, 914. With a total apartment inventory of 160,000 units,
Cincinnati has been seeing a 0.6 percent increase on average for the past decade. Another way to look at it: about 9,100 new class A apartments have been built in the last 10 years. If a renter wants an apartment built in the last decade, only 5.7 percent of the inventory is worth looking at.
“Cincinnati should have more run left in it,” said Jim Crossin, Vice President of Development at Flaherty & Collins Properties. “The demand will be there for the foreseeable future.”