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Multifamily Oversupply?

Multifamily Oversupply?
Chicago multifamily players may be in for a surprise in the short term, according to CoStar's Michael Cohen, despite a general consensus at our two-day Bisnow Annual Multifamily Conference (which wrapped in DC yesterday) that fundamentals are sound.
Mike Rosen, Michael Cohen, and Steve Rubin at the DC JW Marriott on Nov. 19, 2012

Michael says while Chicago shouldn’t lose many jobs in 2013, 2,900 new units may throw local supply and demand principles— especially in and around the Loop—out of whack. Above, he's flanked by Harkins Builders' Steve Rubin and The Martin Architectural Group's Mike Rosen.

Reznick (CohnDebut) MCHI
Greg Leisch at the DC JW Marriott on Nov. 19, 2012
Delta Associates CEO Greg Leisch says uncertainty is causing people to rent rather than own; as a result, apartments represent a better investment than any other CRE asset class and even stocks and bonds. And things could be looking even better: According to Greg, the 4.8% nationwide apartment vacancy rate of could drop 20 bps next year, meaning a bump in rents that would keep multifamily a healthy investment for years.
Office Moving 2012 MCHI
Multifamily Oversupply?
Apartments are smaller, and amenity spaces are bigger. Bozzuto Construction prez Mike Schlegel (with RD Jones' Rebecca Jones) says from '08 to '09, the average unit size Bozzuto built was 964 SF. Units delivering in the next two years are down to 866 SF. (We can't help but think carb-free diets had something to do with all this.) Amenity space per unit? That almost doubled, from 20 SF to 37 SF.
Brad Cribbins, Sue Ansel, and Rick Graf at the DC JW Marriott on Nov. 19, 2012
Renters want a fancy kitchen and bathroom more than they care about size, says Gables Residential CEO Sue Ansel (here with Alliance Residential's Brad Cribbins and Pinnacle prez Rick Graf). With stellar common spaces, renters can have friends over without bringing them into a small apartment. But, even if the oven is destined to become a sweater storage spot, she says, it's gotta look nice.
Yuri Lawrence, Mark Humphreys, and Brooke Iosue at the DC JW Marriott on Nov. 19, 2012
Humphreys & Partners Architects' Mark Humphreys says small used to mean 500 SF, and now his company's Home Rise brand has 350 SF units. He visited his daughter six months after she moved and found a 24-cubic-foot fridge holding just two containers and her dishes still in boxes. What makes more sense for someone who's clearly not cooking at home, he says, is an under-the-counter fridge, a two-burner stove, and less cabinetry. Above, Mark is with Ply Gem Windows' Yuri Lawrence and Humphreys' Brooke Iosue.
speed networking at the DC JW Marriott on Nov. 19, 2012
Ever seen speed networking before? For any newbies (or veterans who are still curious), here's video from Monday, when 100 of the 500 BMAC attendees worked the room with two-minute rapid-fire schmooze sessions.