WORLD PROPERTY CHANNEL ®

(ENCINO, CA) - Marcus & Millichap Real Estate Investment Services, which calls itself the largest commercial real estate brokerage in the nation, has monitored the apartment investment market in 12 metro areas and found a ray of  economic sunshine.

Dallas-Fort Worth, Boston, Denver and Austin, TX are all planning to add jobs this year, increasing the demand for new apartment occupancy.  

The 37-year-old brokerage, however, found job losses occurring in Fort Lauderdale,  Birmingham,  Kansas City, Detroit,  Chicago, Cleveland,  Brooklyn and Boise, ID.


Dallas/Fort Worth

"The investment climate in Dallas/Fort Worth remains positive, underpinned by the strong local economy and vigorous population growth," says Tim A. Speck, regional manager of Marcus & Millichap's Dallas office. "The market is transitioning, with  local investors emerging as the major buyers, expanding their portfolios with residual capital from previous sales."

Speck says employers in the Dallas/Fort Worth hub are expected to add 50,000 jobs by the end of this year, expanding payrolls by 1.7 percent.
Boston

Gary R. Lucas

After adding 17,000 jobs in 2007, Boston-area employers are forecast to create 15,200 positions this year for total employment growth of 0.6 percent.

"Affluent areas west of Downtown Boston will continue to garner heightened interest from both tenants and investors, due to high household incomes and the quality of neighborhoods," says Gary R. Lucas, regional manager of Marcus & Millichap's Boston office. Lucas also manages the firm's Kansas City and Boise offices.

Denver

A. Christofferson

A diverse economic base, including an emerging biotech industry and healthy tourism sector, is driving solid apartment fundamentals in the Denver market.

"Transaction velocity has maintained a steady pace during the last year, fueled by Denver's healthy long-term prospects," says Adam Christofferson, regional manager of Marcus & Millichap's Denver office. Local firms are expected to add 6,000 hires by the end of this year.
Austin

Employers plan to add 10,00 positions in the Texas capital this year. Apartment fundamentals are beginning to stabilize as the current construction boom nears completion.

However, "deal flow will continue to slow to a sustainable rate through the near term, as capital from the West Coast has dropped off significantly," says Bradley Bailey, regional manager for Marcus & Millichap's Austin office. "Other out-of-state investors have remained active in Austin, highlighting the metro's appeal to cash-heavy private buyers."
Fort Lauderdale

Gene A. Berman

In this major South Florida market, "the effects of a soft housing market are partly offsetting weakened demand, as persistent foreclosures are sending many residents into rental housing, especially upper-end properties," says Gene A. Berman, regional manager of Marcus & Millichap's Fort Lauderdale office.

Broward County is expected to lose 16,000 jobs this year. Still, says Berman, "Investors will continue to concentrate on assets with stable operating histories,  as rentals and those in established areas will rebound quickly once the economic recovery is under way."


Birmingham

Despite large employment gains in the government sector, area employers will probably eliminate 1,400 jobs this year. Developers are expected to add only 360 apartment units in metro Birmingham by year-end.

The encouraging news is that "contrary to other regional metros, transaction velocity in Birmingham has increased during the past 12 months, due primarily to elevated yields that are returning some out-of-state buyers to the market," notes Matthew Fitzgerald, regional manager of Marcus & Millichap's Birmingham office.


Kansas City

Led by heavy losses in housing-related sectors, Kansas City-area employers are forecast to cut 10,000 jobs this year, causing payrolls to recede by 1 percent.

"Cash-heavy and institutional buyers have focused on deals involving developers selling Class A assets, particularly in Overland Park and Olathe," says regional manager Gary Lucas.


Detroit

Steven Chaben

The Detroit labor force is forecast to shrink by 35,000 positions this year, a 1.8 percent decrease.

"Active investors will likely target the safety locations, such as Ann Arbor, where strong demand for student housing continues to support the lowest average vacancy rate in the metro area," points out Steven Chaben, regional manager of Marcus & Millichap's Detroit office.

Chicago

Job losses this year are expected to total 5,000 jobs for a 0.1 percent reduction.  In 2007, Chicago area employers created 24,300 positions.

"While some suburban residents are expected to move to core properties, key renter cohorts are projected to grow at a rate exceeding the national average for the next five years," says John Przybyla, regional manager of Marcus & Millichap's Chicago office. "This will bolster long-term apartment demand."


Cleveland

Although the Cleveland area is expected to lose a total 3,000 jobs by year-end, this market is expected to rebound quickly, once the economic recovery is under way.

"The outlook for the Cleveland investment market remains fairly bright, although velocity may moderate in 2009, as owners are still unwilling to discount prices, despite more conservative investor expectations," says Michael Glass, regional manager of Marcus & Millichap's Cleveland office.


Brooklyn

Job losses totaling about 3,500 have slowed household creation and tightened consumers' budgets citywide.  This New York  borough created nearly 6,800 jobs in 2007.

Still, says J.D. Parker, regional manager of Marcus & Millichap's Brooklyn office, "buyers continue to target assets in and around the CBD, as reflected by both sales prices and deal flow."


Boise

This Idaho capital expects to lose 1,800 jobs this year, decreasing total employment by 0.6 percent.  Only about 220 apartment units will be added to inventory this year.  About 700 units were delivered in 2007.

Gary Lucas, who also manages the Boston and Kansas City offices for Marcus & Millichap, isn't dismayed.  "Healthy fundamentals and potentially greater returns will help to sustain investor interest in Boise," he says.