Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Bloomberg Customers

Businessweek Archives

The Rental Market Tug-of-War

? How to Comparison Shop for Mortgages |


| Among the losers: Condo associations ?

April 09, 2007

The Rental Market Tug-of-War

Chris Palmeri

There are two schools of thought on what will happen to apartment rents now that the housing market is slowing. The University of Southern California's Lusk Center for Real Estate came out with a report last week predicting that rents will pick up steam. So many people buying homes kept a lid on rents in recent years. That's beginning to change. The USC researchers predict that rents in Los Angeles, for example, will climb 5% this year from the citywide average of $1,470 a month. Afterall, occupancy rates are a healthy 96%. They are predicting that, even though some 6,000 new units are under construction, including a lot of projects near public transporation lines. Good news for commuters!

The other theory goes like this: Cornerstone Real Estate Advisers, a research outfit based in Stamford, CT notes that a lot of apartments have been taken off the rental market in recent years because it was so much more lucrative to sell them as condos. Then trend may now be going the other way. Projects begun as condos will be switched to rental units--holding down rents. Indeed some REITs that focus on apartments have said as much, including Equity Residential, the nation's largest apartment owner. Time to invest in rental property? May be, maybe not.

05:40 PM

TrackBack URL for this entry:

Both will occur but there won't be enough reversions to impact the market since these areas are either tight, or rents are low enough there is not a great incentive to do so. Occupancy above 95% is a signal to raise them. Rents will rise.

Posted by: Lord at April 10, 2007 01:32 PM

blog comments powered by Disqus