MULTIFAMILY

MULTIFAMILY

The demand for multifamily rentals stayed strong in 2013 creating low vacancy numbers across the city.  The year-end vacancy rate dropped from 9.3% to 7.2%, which is the lowest rate the market has seen since 2008.   According to the Savage Report, vacancy rates were below 10% in all areas of the city and the improving market is strengthening landlords’ positions allowing them to start raising rents.  Almost half of the communities surveyed by Savage reported raising rates by an average of 2.9%.

As expected, developers are bringing new projects on the market to meet the strong demand.  Over two thousand new units are either under construction or announced with plans to start construction this year.  The largest of the new projects is the 438 unit Stoney Pointe Apartments which are under construction at K-96 and Greenwich.   The majority of the other developments are planned for somewhere between 100 and 200 units.   The market is expected to be able to absorb the new inventory over time without causing significant harm to the existing properties.

Downtown Wichita continues to be a vibrant part of the City’s multifamily market.  The new projects that opened in 2013 were well received and had little trouble filling spaces.  The Lux brought two floors of their multifamily segment on line and will have the remaining units available for lease early in the year.  The Wichita Downtown Development Corporation is projecting that 254 more residential units will come on line in 2014.  Some of these units will be in two new properties which started construction in 2013 on west First Street and at Maple and McLean Boulevard.  The major multifamily announcement in the downtown area was the River Vista Residences which will be a new 154 unit complex on the West Bank that will include retail space as well as boat and bicycle rentals.  Construction is expected to begin in 2014.

FORECAST

The multifamily market will be very active in 2014 as new projects come on line and others start construction.  The additional inventory may cause vacancy rates to increase slightly but won’t have a major impact overall as the demand for rental properties will stay strong.

Multifamily 10 Year Vacancy History

Year Values
2013 7.2%
2012 9.3%
2011 10.9%
2010 8.8%
2009 10.5%
2008 7.2%
2007 6.6%
2006 8.5%
2005 10.6%
2004 13.9%

Apartment Rents

Year Studio 1-Bedroom 2-Bedroom 3-Bedroom Town Home
2013 423 553 667 799 829
2012 400 527 647 786 821
2011 385 517 644 786 870
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