As the Urban Land Institute noted in their “Emerging Trends in Real Estate” report, “2016 is the year of the secondary and tertiary markets.”
This is readily apparent in East Texas (where all properties of our multifamily portfolio deal are located). While yields have been favorable, construction has not kept pace with demand in many smaller markets situated between and near the major Texas cities of Austin, Dallas, Houston and San Antonio, as local expert Chase Tucker notes in this piece.
More broadly, vacancy rates are likely to remain historically low, even as average rents continue their steady ascent. Suburbs in particular are likely to benefit from job growth, as noted in this piece by National Real Estate Investor.