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Apartment boom is rocking Oklahoma

Norman-based Commercial Realty Resources Co. and UBS Financial Services Inc. agree: Oklahoma is where the investment action is for multifamily properties.
by Richard Mize Modified: July 24, 2014 at 9:00 pm •  Published: July 23, 2014

Apartment construction is booming and with the Oklahoma City and Tulsa economies beating the country’s, Oklahoma is at ground zero.

That’s according to Mike Buhl, multifamily property broker and owner of Commercial Realty Resources Co. in Norman.

There aren’t enough apartments available to meet investor demand, he said, and developers are stepping up.

“Investors that can’t get their hands on the product they want at the yield they want are turning to development,” he said in a midyear apartment market report. “And because vacancy is down and rents are rising, multifamily construction is booming.

“There are really no other options for investors that want to be in the market and can’t find existing core product.”

UBS Financial Services Inc., in fact, ranked Oklahoma City at No. 1 and Tulsa at No. 11 earlier this month in a proprietary updated ranking of the top 58 most attractive metropolitan multifamily markets.

In compiling the ranking, the subsidiary of Swiss UBS AG used its own data plus information from the U.S. Census, CBRE, Real Capital Analytics, the National Association of Realtors and other sources.

“We evaluated many factors in our analysis including job growth (for the past two years and projected for the next two years), rent as a percent of after-tax monthly homeownership costs (to measure the rent-/buy calculus), the past four quarter average multifamily transactional cap rates, new rental capacity additions over the next 12 months as a percent of existing rental inventory, net unit absorptions as a percent of net unit completions over the past five years, current vacancy rates, rent growth” and other metrics, a UBS report by Jonathan Woloshin shows.

Woloshin said UBS gave extra weight to job growth, new capacity and the cost of renting versus the cost of homeownership, and noted that “the choice of evaluative metrics and weightings was very subjective and based on myriad conversations with multifamily investors and owners across the country.”

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by Richard Mize
Real Estate Editor
Real estate editor Richard Mize has edited The Oklahoman's weekly residential real estate section and covered housing, commercial real estate, construction, development, finance and related business since 1999. From 1989 to 1999, he worked...
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