CHICAGO–(BUSINESS WIRE)–Origin Investments, a leading private equity real estate fund manager, today released a new report created using Origin Multilytics, its proprietary suite of machine learning models, and information provided by its expert team of regional deal acquisition agents. Multifamily Markets to Watch 2022 cites the Sun Belt Phoenix, Tucson, Las Vegas, Austin and Nashville markets as metropolitan areas with great opportunities for rental growth, investment and development.
Multilytics evaluated 150 U.S. markets to identify those with the most promising fundamentals for rental rate growth by analyzing billions of data points from a variety of leading independent and government sources. The data included historical rental rates; employment, population and income growth; supply and demand; recent migratory changes; and housing affordability, among others. Origin combines data from Multilytics with the expert knowledge of its acquisition managers to develop its investment and acquisition strategy.
“While every market is unique and has its own nuances, there are common themes in our Multifamily Markets to Watch 2022 report,” said David Welk, executive managing director of acquisitions at Origin. “There is a job creation tap that is not likely to be turned off anytime soon. We see, and in many cases participate in, tremendous investment and development opportunities in many of these markets. »
Common characteristics of selected metropolitan areas include business-friendly environments, four-season lifestyles, and increasingly diverse and robust labor markets that often include big tech, Origin’s report explains. The five medium-sized cities also have room to grow and suburban areas which further enhance the potential for expansion. The average rent rose 3% in each of the five years before the pandemic, according to data from the Bureau of Labor Statistics. These markets offer opportunities with high potential for multi-family real estate investment and growth well beyond this 3%.
Here are snapshots of each of Origin’s markets to watch:
Phoenix offers a California lifestyle without the price tag, and this accessibility for businesses and individuals is driving diverse population and economic growth. Logistics and tech manufacturing are serving as engines of growth as companies seek to avoid California prices while staying within a day’s transit of 33 million people. Semiconductor chipmakers have $32 billion in investment underway, while electric vehicle startups including Lucid, Nikola and ElectraMeccanica aim to turn the region south of Phoenix into a electric vehicle manufacturing center.
Tucson is a promising player
The stature of Tucson, long considered Arizona’s second city, is emerging as an affordable alternative to Phoenix – close enough to capitalize on proximity without giving up its own distinct identity. As the city’s northwest submarkets emerge as viable alternatives for employees of Phoenix’s southernmost businesses, the connection to the state capital could become smoother in the coming years with a potential passenger rail route. Expected growth sectors include those that support the city’s largest private employer, Raytheon Missile Defense, such as logistics and information technology. Virginia-based aerospace/defense company Leonardo Electronics expands to Tucson with a new $100 million semiconductor laser manufacturing facility.
Las Vegas offers a solid bet
Las Vegas is rising above its reputation as a gambling mecca and establishing itself as an affordable, business-friendly alternative. This attracts out-of-state investment focused on building a more diverse and reliable long-term economy by encompassing industries ranging from health care and financial services to logistics and information technology. California-based machine tool maker Haas Automation builds $327 million project manufacturing plant in Henderson; the US Department of the Interior is building the billion-dollar Gemini Solar Project, the nation’s largest solar farm, northeast of the city; and hotel and casino projects totaling $4.7 billion will be completed within two years. With jobs and incomes on the rise, rental growth is on a long trajectory.
Austin shows no signs of cooling down
The Texas capital remains very attractive and relatively affordable for the tech giants who flock there and make significant investments there. Oracle, Samsung, Apple, Facebook and Tesla are injecting billions of dollars and creating thousands of well-paying jobs. The city has a long streak of growth, especially since there will also be an influx of businesses to support these big businesses. Austin has the highest revenue growth and the third highest job growth of any market surveyed, but despite its popularity, it continues to be relatively affordable.
Nashville is the Superstar of the South
Nashville’s business and lifestyle-friendly climate, with a big-city vibe and world-class culture, continues to drive impressive growth. According to Multilytics analysis, this established market, which is currently experiencing tight housing supply, is expected to continue its steady growth in employment and income as anticipated technology and other industries enter the market. Nearly 200 restaurants, bars and cafes, as well as 23 hotels, opened in 2020 and 2021. The Tennessee Titans football team is in talks to build a $1.2 billion replacement stadium, and the the city’s football club has just opened the largest football stadium in North America. Alliance Bernstein, Amazon, Oracle and General Motors are among the companies spending billions and creating thousands of jobs in the city. All are good signs of continued success there.
Origin Investments is increasingly committed to using artificial intelligence and machine learning to help guide informed decision-making at all stages of the investment, management and disposition lifecycle.
“There is no single metric that any prudent real estate investor or fund manager should rely on when investing tens of millions of dollars in a project,” said David Scherer, co-CEO of Origin. . “Instead, it is the compilation of data and intense intelligence on the ground that guides markets to study deeper before making commitments.”
About Origin Investments
Origin Investments helps high net worth investors, family offices and registered investment advisers grow and preserve their wealth by providing best-in-class real estate solutions. It is a private real estate manager that builds, buys and lends to multi-family real estate projects in fast-growing markets across the United States. Since its inception in 2007, Origin has executed over $2.6 billion in real estate transactions and its executives have invested over $75 million alongside investors. Origin prides itself on providing unparalleled service to investors and its performance ranks the firm in the top decile of top performing private real estate fund managers ranked globally by Preqin, an independent provider of alternative investment data. The company is currently accepting new investors for its open-ended funds Growth Fund IV, IncomePlus, Multifamily Credit and QOZ II. To learn more, visit www.origininvestments.com.