CHICAGO–(BUSINESS WIRE)–Aug. May 2022–
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 the insights of its expert team of regional transaction acquisition officers. Multifamily Markets to Watch 2022 cites the Sun Belt markets of Phoenix, Tucson, Las Vegas, Austin and Nashville as metro areas with great opportunity for rental growth, investment and development.
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Origin Investments 2022 multi-family real estate markets to watch with the highest potential for private equity real estate investments. (Graphic: Business Wire)
Multilytics evaluated 150 US markets to identify those with the most promising fundamentals for rent increases by analyzing billions of data points from a variety of leading independent and government sources. The data includes historical rental rates; employment, population and income growth; Supply and demand; recent migration changes; and housing affordability, among others. Origin combines Multilytics data with the expertise of its acquisition officers to develop its investment and acquisition strategy.
“While each 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 spigot of job creation that is unlikely to be turned off anytime soon. We see enormous investment and development opportunities in several of these markets and in many cases we are participating in them.”
Common characteristics of the selected metro areas include a business-friendly environment, a four-season lifestyle, and increasingly diverse and resilient job markets that often include large tech companies, Origin’s report explains. The five medium-sized cities also have room for growth and suburbs, further increasing the potential for expansion. The median rent rose 3% in each of the five years leading up to the pandemic, data from the Bureau of Labor Statistics shows. These markets offer opportunities with high potential for multifamily investment and growth well beyond that 3%.
Below are snapshots of each of the Origin markets:
Phoenix offers a California lifestyle without the price tag, and this affordability for business and individuals is driving demographically and economically diverse growth. Logistics and engineered manufacturing serve as growth engines as companies seek to avoid California prices while staying within daily transit of 33 million people. Semiconductor chip makers have $32 billion in investments afoot, while electric vehicle startups like Lucid, Nikola and ElectraMeccanica aim to transform the area south of Phoenix into an electric vehicle manufacturing hub.
Tucson is a climber
Long considered Arizona’s second-largest city, Tucson’s prominence is fast becoming an affordable alternative to Phoenix — close enough to take advantage of the proximity without sacrificing its own distinctive identity. As the city’s northwestern submarkets emerge as viable alternatives for employees of Phoenix’s southernmost businesses, the connection to the state capital could become smoother with a potential passenger rail route in the years to come. Expected growth sectors include those supporting the city’s largest private employer, Raytheon Missile Defense, such as logistics and information technology. Virginia-based aerospace/defense company Leonardo Electronics is expanding in Tucson with a new $100 million semiconductor laser manufacturing facility.
Las Vegas offers a solid bet
Las Vegas is evolving from its reputation as a gambling Mecca and establishing itself as an affordable, business-friendly alternative. This attracts foreign investment focused on building a more diverse and reliable long-term economy, spanning industries from healthcare and financial services to logistics and information technology. California machine tool maker Haas Automation is building a $327 million manufacturing facility in Henderson; the US Department of the Interior is building the $1 billion Gemini Solar Project, the country’s largest solar farm, northeast of the city; and $4.7 billion worth of hotel and casino projects to be completed within two years. With jobs rising and incomes rising, rental growth has come a long way.
Austin shows no signs of cooling down
The Texas capital remains very attractive and comparatively affordable to the tech giants that flock there and make significant investments. Oracle, Samsung, Apple, Facebook and Tesla are investing billions of dollars and creating thousands of high-paying jobs. The city has a long growth prospect, especially considering there will also be an influx of businesses to support these big-name firms. Austin has the highest income growth and the third-highest job growth of any market surveyed, but despite its popularity, it remains comparatively affordable.
Nashville is the superstar of the south
Nashville’s business-friendly, lifestyle-friendly climate with a big city vibe and world-class culture continues to drive impressive growth. According to the Multilytics analysis, this established market, currently suffering from a shortage of housing, is expected to continue its steady growth in employment and income as planned technology and other industries enter the market. Almost 200 restaurants, bars and cafes and 23 hotels opened in 2020 and 2021. The Tennessee Titans soccer team is in talks to build a $1.2 billion replacement stadium, and the city’s soccer club has just opened North America’s largest soccer stadium. Alliance Bernstein, Amazon, Oracle and General Motors are among the companies spending billions and bringing thousands of jobs to the city. All good signs for continued success there.
Origin Investments is increasingly committed to using artificial intelligence and machine learning to support informed decisions at all stages of the investment, management and divestiture lifecycle.
“There is no single metric that a 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 in-depth information on the ground that guides which markets should be examined more thoroughly before commitments are made.”
About Origin Investments
Origin Investments helps high net worth investors, family offices and registered investment advisors grow and preserve wealth by providing premier real estate solutions. They are a $75 million private real estate manager that builds, buys and lends multi-family real estate projects in fast-growing markets across the United States alongside investors. Origin prides itself on providing investors with unparalleled service and its performance places it in the top decile of top-performing private real estate fund managers ranked by Preqin, an independent provider of alternative investment data, worldwide. The Company is currently accepting new investors for its Growth Fund IV, IncomPlus, Multifamily Credit and QOZ II mutual funds. To learn more, visit www.origininvestments.com.
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CONTACT: Michael Millar, Open Slate Communications
KEYWORD: ILLINOIS UNITED STATES NORTH AMERICA
INDUSTRY KEYWORD: COMMERCIAL & REAL ESTATE CONSTRUCTION & REAL ESTATE FINANCE CONSULTING PROFESSIONAL SERVICES URBAN PLANNING REIT HOUSING & REAL ESTATE
SOURCE: Origin Investments
Copyright Business Wire 2022.
PUB: 05/10/2022 14:37 / DISC: 05/10/2022 14:37