Multifamily Industry Outlook and Trends Forecasted for 2022
With the rise in at-home work and the increasing movement towards more meaningful living, social activation of amenity spaces is on the rise as one of the leading trends into the 2022 and beyond. More recently, socially activated amenity areas have transitioned from a ‘perk’ in modernized apartments to a standard of living. For those who are still working remotely, or even with hybrid work and home offices, having a convenient way to separate the veil between work life and home life is critical to avoiding monotony and burnout of the blending between the two atmospheres. By creating engaging amenity spaces that cater to both leisure interests and convenience, greater lasting value can be provided to your tenants. Here are some examples of how to spark life into your building’s amenity spaces.
A strong outlook on multifamily as an investment and a business
According to predictions from CBRE, the economic rebound post-pandemic is anticipated to continue with a rising GDP of 4.6%, and inflation is expected to only last temporarily, subsiding in the second half of 2022. The spike is anticipated to initiate the phasing out of asset purchases mid-year from the Federal Reserve, paving the way for a rise in interest rates thereafer.
For multifamily, the prediction for investments is a rise from $213 billion for the year of 2021, to $234 billion in 2022, with a net operating income rise of 8% for the upcoming year. They also anticipate a cap in rates for multifamily, allowing properties to remain stable. From a business standpoint, CBRE foresees a 7% growth in rents with continued opportunities particularly for urban Class A properties. They predict that as offices reopen, more people will return to cities which will then turnaround the hard-hit urban and suburban markets who faced challenges with vacancy rates in the onset of the pandemic. Check out CBRE’s full analysis and trends report here.
Rising rent growth especially in metro areas
Due to anticipation of mortgage rates continuing to rise in 2022 and multifamily apartment unit demand remaining strong, Realtor.com predicts a robust market turnaround with rent growth remaining elevated. In markets such as Florida metro areas, high rent growth of over 20% has led a trend of double-digit increases seen across a third of all metro areas with a population of 1 million or greater. Additional locations that have seen substantial upticks include places such as Las Vegas Nevada, Phoenix Arizona, Austin Texas, Raleigh North Carolina, and Atlanta Georgia.
With the anticipated increase in mortgage rates potentially causing possible buyers to remain in the rental market, the number of units under construction is expected to increase. While this is expected to still remain below levels pre-pandemic, it is also expected to be lower than the absorption, meaning that there will continue to be tight vacancy, leading to increased rental rates and growth for multifamily units of up to 10%. View Realtor.com’s full article and outlook here.
A continued focus on health and wellness amenities
In a recent article from Forbes, health and wellness were cited as a top interests of tenants going into the 2022. Residents have repeatedly cited amenities such as pools, yoga rooms, fitness centers, and even factors such as filtration for better air quality. LEED, WELL and FIT well building certifications add meaningful layers for properties to market themselves with a vested intention and interest in the well-being of their residents. In addition to a healthy body, mental and social stimulation ranks high as well for categories of tenant priorities, making the last item on our list of equal importance.
A hybrid model of in-person and virtual events
The future of events is hybrid, according to survey research from experience management company, Qualtrics. While in-person events are anticipated to make a comeback and surpass virtual event attendance, the hybrid model with both online and offline options offers the most engaging turnout for participants into the future.
Findings from their study included over 11,000 global respondents who noted that they favor virtual events, while also being very eager to get back to in-person events. 59% of respondents noted they prefer to attend an event virtually, while 29% of respondents expect to attend only virtual over the course of the next year. 12% of people globally would travel internationally, but 43% would prefer to stay in the country of residence. Meanwhile, 60% of people surveyed would consider an in-person event an essential business purpose.
To appeal to the masses, it was concluded that a hybrid model will continue to be the most successful moving into the new year in order to be inclusive of all audiences and comfort levels. It is worth noting however that preferences do differ around the world between participants, with 69% in Europe voting that they preferred in-person over virtual compared to 57% in the U.S, 49% in Latin America, and 46% in the Middle East.
Virtual events still remained preferable to working residents however, who noted a higher trend in this option. While in-person events show a promising forecasted comeback for the rest of the majority, 67% of managers specifically claimed they would be open to in-person interactions and 60% of global respondents noted they would consider an in-person event for essential business reasons. View Qualtrics full survey synopsis here.
If you’re ready to get on board and find how Circuit can help you stay competitive wit health, wellness and easily deployable social amenities in the multifamily landscape, reach out to our team today!