St. Louis Q4 Multifamily Market Report: Cap Rates Compress, Sales Activity Picks Up to Close 2020
Highlights:
- Operating conditions in the St. Louis multifamily market were steady throughout nearly all of 2020 before cooling in the fourth quarter. The outlook for 2021 calls for economic recovery, which should support the local apartment market.
- Apartment vacancy rose 50 basis points in 2020, with the rate ending the year at 5.1 percent. The rate had tightened in the two previous years.
Rents inched higher in 2020, despite higher vacancy. Asking rents gained 0.5 percent in 2020, reaching $997 per month. Prior to 2020, asking rents had been advancing at a pace of approximately 4.6 percent per year. - Developers delivered approximately 200 units during the fourth quarter and more than 1,000 units for the year. Deliveries have averaged 1,600 units per year since 2015.
- Sales of multifamily buildings picked up at the end of 2020. Prices rose and cap rates compressed; the median price reached $55,100 per unit in 2020, while cap rates averaged 5.6 percent.
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