Austin, TX is often used as an example for the national multifamily boom. There are many reasons for this. Austin has a thriving economy. Many young Americans (i.e. renters) are moving to Austin. And, commercial multifamily has been a strong performer as a result. Since 2014, Austin has added 10,000 doors to its inventory. Amazingly, vacancy is still in the single digits. 2015 will be interesting. Another 8000 doors should be completed. Several questions are on the minds of multifamily investors. Can vacancy remain low? Can rents continue to rise? And, how long will this keep up?
The economic comeback of the Millennials is not a done deal. They are still struggling with record student debt. This debt is unforgivable. It must be paid off. There is more student debt than auto debt. It is impacting disposable income and credit scores. We predict that student loans will keep Millennials – already the largest cohort in the US – renting longer than previous generations.
I started reading this article in the hopes of finding an inspiring tale about a wise man who used commercial real estate to create multi-generational wealth. Unfortunately, this story is a little more nuanced. John Jacob Astor built a lasting financial legacy with commercial real estate. He also tried his hand at a lot of other businesses. I think we can all agree that once he saw the power of commercial real estate, he realized where he should focus his energy.
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