Apartment rents are expected to rise for at least a fifth straight year, with rates rising fastest in popular Over-the-Rhine, Downtown and in Uptown neighborhoods.
Commercial real estate services firm CBRE said rents in Greater Cincinnati averaged $777 a month in 2013, up from $746 a year earlier.
This year, rents are expected to rise by 2.5 percent in suburban areas, 4 percent in urban areas – and even more in neighborhoods most highly sought by young professionals and older tenants shedding mortgage ties.
Data were presented at a Greater Cincinnati/Northern Kentucky Apartment Association event Tuesday night.
“There’s a tremendous demand for housing in the urban core that we haven’t seen” in decades, said Dan Schimberg, president of Corryville-based Uptown Rental Properties.
An older apartment housing stock, occupancy rates averaging above 90 percent and changing housing preferences are driving interest in building new units, CBRE Cincinnati senior vice president David Lockard said.
Apartment occupancy rates were at their highest level in a decade at 93.7 percent in December, CBRE said.
Population and employment growth are continuing to rise steadily in the region, increasing demand for rentals. Project developers also are finding easier access to financing despite rising construction and labor costs.
CBRE estimates that 4,321 new apartment units – many of which will be upscale projects – will be built in the region through 2016. “Investors from around the country are being drawn to Cincinnati and the Midwest due to the relative predictability of investment returns,” Lockhard said.
He said the sale market for multifamily properties also is expected to pick up in the second half of this year. Multifamily properties were sold for a total of $264 million last year, including Current at the Banks in Cincinnati, the Vinings at Fort Mitchell and Mallard Crossing in Loveland.
Among rental projects under construction:
- AT580: Anderson Birkla is leading a project to add 176 apartments at Sixth and Walnut streets Downtown.
- Monmouth Row: Towne Properties’ project in Newport plans to add 101 one- and two-bedroom units at Fourth and Monmouth streets.
- VP3: A $30 million development near the 2600 block of Vine Street includes 147 apartments and a parking garage. Uptown Rental Properties and North American Properties are developing the project, scheduled to be completed next year.
2BR, 1BA: What’s the rent?
Average rents* for apartments with two bedrooms and one bath have risen more than 10 percent since 2009 in Greater Cincinnati. How rents compare across the region: