Apartment Market Insight

Thursday morning’s joint NAIOP Pittsburgh/Master Builders’ Association program on the hot multi-family market was surprisingly informative. Surprising because there has already been so much talk about the apartment market that I didn’t expect anything new. The panelists – Oxford’s Steve Guy, IRR’s Paul Griffith, First Niagara’s Kris Volpatti and PJ Dick’s Eric Pascucci – lived up to expectations, however, and gave some different insight.

Pascucci provided a better look at what drives costs on multi-family projects and offered suggestions for planning so that developers could meet the critical June 1 shopping date. Volpatti and Griffith gave an inside look at what makes lenders and appraisers happy – and nervous. These two were especially helpful in looking out at the 3,900 units coming online in 2016-2017 to forecast some rent softening until absorption caught up.

Steve Guy talked about Oxford’s appetite for developing apartments based upon some very stark changes in demographics and renter preferences that they had observed after the housing crisis. Guy especially stressed the strong demand in the urban core and fringe. He also noted that while lenders may be growing more cautious, there was no shortage of investors anxious to add equity to an apartment deal.

Lots of comments followed the program. Perhaps the most interesting was from Chapman’s Steve Thomas, who said he came into the program thinking his company should build some more apartments and left feeling he should sell the ones he owns.

Panelists (left-to-right) Kris Volpatti, Steve Guy, Paul Griffith and Eric Pascucci.

Panelists (left-to-right) Kris Volpatti, Steve Guy, Paul Griffith and Eric Pascucci.

Some project news: Trumbull Corp. was awarded the $164 million CSVT Bridge in Union County. Black & Veatch was selected as EPC contractor for the new $500 million Tenaska Westmoreland plant in South Huntingdon Twp. Fort Willow Development selected PJ Dick Inc. to build its $25 million Fort Willow Apartments, a 191-unit complex in Lawrenceville. The Western Westmoreland Municipal Authority is set to award contracts for its $23.9 million Brush Creek WWTP on November 16. Chivers Construction from Erie is the low bidder.

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