The annual pace of U.S. apartment rent growth accelerated to 3.3 percent in the fourth quarter, according to real-estate technology and analytics firm RealPage Inc. Momentum in annual rent growth proved substantial in the last half of the year, pushing performance in 2018 ahead of the 2.5 percent growth recorded in 2017.

Apartment owners and operators gained pricing power due to robust demand that drove occupancy to a fourth-quarter rate of 95.4 percent, up from 95 percent in late 2017. The country’s occupied apartment count climbed by 323,290 units in 2018, the strongest demand realized since 2010. Demand topped annual completions of 287,007 units.

“In contrast to the stumble seen in for-sale housing demand in recent months, the country is gaining lots of additional renters,” said RealPage’s chief economist Greg Willett. “Job production is fueling household formation among younger adults who tend to rent, and loss of existing renters to purchase is running at levels below the historical norm.”

Among the country’s large metros, local rent growth leaders are Las Vegas and Phoenix, each posting price jumps of 7.4 percent in 2018. Rent growth reaches 5 percent in Orlando. Several California markets also are experiencing big rent increases, with prices up 4.3 percent to 4.8 percent in Sacramento, San Diego, San Jose, Riverside-San Bernardino and San Francisco.

Some small metros are experiencing even stronger rent boosts. Rents are up 21.3 percent in the West Texas Oil Patch markets of Midland and Odessa, while price increases between 7 percent and 7.9 percent are occurring in Gainesville, Fla.; Eugene, Ore.; Reno, Nev., and Tucson, Ariz.

Houston’s 0.3 percent rent growth is the weakest performance among big metros. Slight rent cuts of less than 1 percent are occurring in five small markets: College Station, Texas; Corpus Christi, Texas; Davenport, Iowa; Baton Rouge, La.; and Fargo, N.D.

Building in the U.S. apartment sector remains aggressive. Within properties already under construction, there are 319,123 units slated to complete in 2019. However, delivery delays largely tied to labor shortages are routine, so this year’s new supply probably will fall a bit short of the 300,000-unit mark.

Near-term new supply leaders include Dallas, Los Angeles, Washington, D.C., Seattle and Atlanta. Dallas has the most product on the way, just over 27,000 units. Adding in the 7,000 or so apartments under construction in adjacent metro Fort Worth pushes ongoing building to nearly 35,000 units across North Texas.

“With so much high-end new product finishing in the near term, there will be a scramble to attract resident prospects in the luxury apartment niche,” said Willett. “At the same time, vacant units available to lease can be very difficult to find in properties in the middle to lower end of the pricing spectrum. Few renters are moving around within the nation’s more moderately priced apartment stock, in part just because there are so few housing options available for all but the most affluent renters.”

Hunt Real Estate Capital provided a Freddie Mac Small Balance Loan in the amount of $5.85 million to refinance a multifamily property located in the Roxboro- Manayunk neighborhood of Philadelphia.

The loan is a 10-year fixed rate loan with a 30-year amortization schedule. The property also benefits from a 10-year tax abatement. Terrace Lofts is a four-story mid-rise style apartment complex with 32 units.

"The sponsor of the project is a real estate investor with 11 years of direct investment experience in multifamily assets in the Philadelphia market," Harris Heller, managing director for Hunt Real Estate Capital. "We were pleased to partner with the sponsor as the finance entity on this deal to secure a quality rental option in a solid market."

CIT Finances Miami Apartment Building

CIT Group has financed $31 million in financing to acquire and renovate a multifamily apartment building in Miami.

The Miami-based property is being acquired through a joint venture between Mill Creek Residential and Rockwood Capital. The building is a 20-story, 166-unit multifamily building in Miami's Health District.

"The property offers the opportunity to invest, with a partner in a Class-A cash-flowing asset with renovation, development and operational upside," said David Streicher of Rockwood.

Balfour Beatty Communities has acquired the Preserve at Southwind, a 306-unit apartment building located in Memphis.

The latest addition to Balfour Beatty Communities’ multifamily portfolio was completed as part of a joint venture with ApexOne Investment Partners and American National Insurance Co. and marks the company’s first investment in Memphis. Newmark Knight Frank served as the broker for the acquisition. Built in 2000, the Preserve d offers 1-, 2- and 3-bedroom apartment units ranging from 700 to 1434 square feet of living space.

“We are excited to enter the Memphis market with the acquisition of Preserve at Southwind,” said Michael Price, senior vice president of residential transactions for Balfour Beatty Communities. “The area shows considerable promise for continued growth, creating increasing demand for well-located, quality apartment homes. We look forward to capitalizing on that demand through a series of targeted property renovations and our world-class management services.”

Renovations to the Preserve will include updates to apartment home interiors, amenities and common areas. Balfour is a national residential real estate investment and management company with more than $6 billion in residential assets.