RealEstateJournal | Apartment Development Heats Up on U.S. Coasts
RealEstateJournal Apartment Development Heats Up on U.S. Coasts
Many multifamily real-estate investment trusts have been ramping up their development pipelines, but increasingly are building in only a handful of U.S. cities along the coasts.
About 96% of the new apartments being built by REITs at the end of the fourth quarter were concentrated along the East and West coasts, according to a Feb. 28 report by Morgan Stanley. That compares with about 87% in the fourth quarter of 2004.
Archstone-Smith Trust, for instance, had about $1.3 billion in apartment projects under construction at the end of the fourth quarter -- more than double the amount it spent on projects under construction three years ago -- with nearly all of it concentrated in a few coastal cities.
Part of Archstone-Smith's strategy is to target areas such as Boston, New York and Southern California, where there is a high cost of homeownership and barriers to competition, such as a shortage of developable land and an often-lengthy permitting process. "It's hard to find those characteristics in a market that isn't coastal," says R. Scot Sellers, chief executive of the Colorado-based REIT.
Many multifamily real-estate investment trusts have been ramping up their development pipelines, but increasingly are building in only a handful of U.S. cities along the coasts.
About 96% of the new apartments being built by REITs at the end of the fourth quarter were concentrated along the East and West coasts, according to a Feb. 28 report by Morgan Stanley. That compares with about 87% in the fourth quarter of 2004.
Archstone-Smith Trust, for instance, had about $1.3 billion in apartment projects under construction at the end of the fourth quarter -- more than double the amount it spent on projects under construction three years ago -- with nearly all of it concentrated in a few coastal cities.
Part of Archstone-Smith's strategy is to target areas such as Boston, New York and Southern California, where there is a high cost of homeownership and barriers to competition, such as a shortage of developable land and an often-lengthy permitting process. "It's hard to find those characteristics in a market that isn't coastal," says R. Scot Sellers, chief executive of the Colorado-based REIT.
posted by Patrick Leblanc at 2:05 PM
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