CBRE report shows apartments are in tight supply

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The supply of apartments remains tight in New Castle County, commercial real estate firm CBRE reported.

The vacancy rate was 5.5 percent, a figure that often denotes full occupancy.

The Delaware Valley multifamily housing has remained resilient through the pandemic, CBRE noted.

blankThe vacancy rate has slightly decreased during 2020. In the second quarter effective rent growth remained positive at 1.7 percent.

Of 49 distressed multifamily properties in the region, only 16 have been put on a watchlist by lenders since May, a time when the brunt of the financial effects of COVID-19 would have been fully realized.

Sales of multi-family complexes in the first two quarters amounted to only 24.5 percent of the figure in the same period of 2019, although several large portfolio transactions in early 2019 affected the numbers.

blankTwo buildings have been delivered recently in the northern Delaware market, one in Wilmington proper and one in Middletown, resulting in 316,604 sq. ft. of new rentable space.

There are currently no buildings under construction in the area after construction of new complexes in Wilmington and the suburbs.

The Garrison, a new apartment development in New Castle is on track to close at a record price per unit, CBRE noted.

New Castle County saw $73.1 million in apartment complex sales activity in 2019, with investors citing the strength of the market. In the first half of 2020, that figure had fallen to $15.3 million.

Investors have been buying and upgrading existing multi-family complexes in New Castle County and in some cases making upgrades that allow for higher rents that are still below figures for other areas around Philadelphia.

The CBRE report indicated that northern Delaware rents were the lowest in the Philadelphia metro region.

Delaware apartments can have lower operating costs, due in part to lower property taxes.

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