For real estate investors seeking an appropriate commercial multifamily market, employment growth is one of the most important factors to consider. Employment growth in a given market has a direct effect on population growth, which in turn has a direct effect on rental demand. When analyzing employment growth in a region, commercial multifamily investors often start by gaining an understanding of job creation trends. As a general rule, larger job markets play host to more job creators, allowing for increased stability of the overall employment level. However, it is also important to consider the composition of employers in a market. Manufacturing and virtual service jobs tend to be highly unpredictable, while government and health care jobs rarely move out of a market. The demographics of job holders in a market also play an important role in employment growth. Since the 18-34 year-old demographic is the most likely to rent, investors pay careful attention to jobs held predominantly by that age group. If jobs are being created with this demographic in mind, it is reasonable to assume that rental demand will increase as well.
0 Comments
Leave a Reply. |
AuthorAn experienced real estate investor and co-founder of 37th Parallel Properties in Richmond, Virginia, Chad Doty has established himself as a leader in commercial multifamily real estate. Archives
January 2017
Categories |