Beaming Bright: Sun Belt Rental Properties Emanate Sunny Investments
In the July/August 2024 issue of Institutional Real Estate Americas, Rafael Aregger, Head of Investments US, discusses strong investor interest for prime multifamily assets and Empira Group’s conviction in the long-term investment opportunity within the Sun Belt.
The US is shifting from ownership to a rental market, particularly in Sun Belt states. In 2023, only 26 percent of buyers were first-time buyers, compared with a peak of 50 percent in 2010 as noted in the National Association of Realtors Home Buyers & Sellers Generational Trends report. Of the 26 percent of first-time buyers, the average age was 36 – an all-time high. With renter-occupied units in the country increasing 22.8 percent since 2005 and average renter occupancy rate at 48 percent of units vs. 52 percent owner-occupied, institutional investors are well positioned to capitalize on unique investments in fast-growing metro areas.
“Empira Group views the Sun Belt real estate market, primarily residential, as highly sustainable and durable. Our Empira Residential Invest US (ERIUS) fund has a develop-and-hold strategy which aims to create attractive long-term opportunities for investors,” says Aregger. “Investors benefit from in-house development teams and hands-on management, like found at Empira, as there is better alignment of cost and quality control during the planning, construction and letting phases as well as synergies across projects. Holding attractive assets focuses on sustainable rental income returns to investors with no reliance on short-term market conditions or sales proceeds.”
He adds, “The Sun Belt states have experienced significant rental increases, which will likely continue to appreciate as the multifamily sector is well positioned to outperform other real estate sectors going forward.”
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