NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) today released its fourth issue of PropertyBeat, focused on the multifamily market. This report will provide an overview of the key trends shaping the underlying commercial real estate (CRE) markets in KBRA’s defined Primary Markets (KPrime). In addition, our Market Spotlight section rounds out our spotlight on the greater San Francisco Bay area and the challenges both landlords and retailers are facing in that market as supply comes online.
The multifamily industry has outperformed other segments of the commercial real estate market, as the slumping housing market has been a boon for rentals. That said, supply growth has slowed the rate of vacancy declines seen in many markets. Completions in 2013 outpaced 2007 levels (more than 46.0% of 2007 units) and there are no signs of slowing in 2014. Due to the supply increase, we generally expect vacancies to increase in many of our KPrime markets over the next few quarters, tempering the outsized growth seen in recent years.
Net absorption within our KPrime markets was down slightly at 14,519 units in Q2 2014, but was up 0.9% on a year–over-year (YOY) basis. Vacancy declined for the 18th consecutive quarter, to end Q2 2014 at 3.8%, its lowest level since 2000.
About Kroll Bond Rating Agency
KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).