Back in 2008, we saw hundreds of vacant multifamily units hit the market as newly constructed projects became deliverable. I distinctly remember reading articles on Glendale News Press that had comments from furious residents who opposed the squalor of the construction, the environmental impact and traffic they would create, etc. You see the same exact things today. Not-so-coincidentally, if you trail back to 2003, you’ll see an even smaller amount of units hitting the market and the same amount of disapproval. On a chart, it looks something like this:
So, why should a private investor care about these new developments?
Historically, construction surges have raised vacancy rates, thus reducing rental rates. This effect lasts two to three years and then begins recovering naturally. However, if you look at the 10 year graph above, you’ll notice that today’s construction boom of apartment buildings in Glendale is much more intense than previous years. That doesn’t even account for the ones that will still begin construction after this year.
More units on the market means more competition for landlords when leasing a vacant apartment.
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