Conventional apartment mortgage loan rates decreased almost 125 basis points last year even before the Fed rate cut, said Steve Blank, who tracks the capital markets for the Urban Land Institute. Equity investors' interest in apartment investors is growing as well. Altogether, this involves 39 properties with 12,300 units. It also seeks joint ventures. The company's clients have a growing appetite for apartment investment, it says.
Prospects are brighter for real estate investments trusts, too.
Only five REITs issued new stock during the year, he said. He expects to see problems in some markets, but he feels the industry is fairly well protected from overbuilding. That's because supply is constrained by a variety of factors, not just the supposed discipline of the capital markets. Those factors include zoning restrictions and local opposition to high-density housing.