NEW YORK, NY, 13 January, 2016: Dome Equities, a private equity real estate investment firm specializing in core+, value-add, and opportunistic strategies in U.S. real estate, has issued its views on the 2016 U.S. multifamily housing market. The company focuses on apartment properties as a source of current income, long-term capital appreciation and inflation protection for its investors through the acquisition of hard real estate assets.
Dome Equities estimates that, though a steady flow of supply of new apartment units will enter the major urban centers over the next few years, increased rental demand and high rental prices will remain the norm in most regions. According to researcher Axiometrics, Inc., over the next three years, developers are expected to build almost 1 million apartments in the United States. This compares to the prior three years new supply of nearly 900,000 newly constructed units. Occupancy and rent growth have still been tracking at historically high rates in the face of this supply trend. Demographic trends are expected to continue supporting favorable sector fundamentals.
A key demographic trend includes a high growth rate in the prime-renter age cohort and the fact that this segment continues to experience life-changing events that typically trigger home buying later in life. According to Census Bureau statistics, both marriage and first births are occurring at the oldest age on record. Couple this with onerous and record levels of student loan debt, prohibitive mortgage requirements, and restrained job growth creates the positive fundamental environment for rental apartments. Declines in homeownership rates have yet to find a bottom with the Census Bureau reporting the third quarter 2015 homeownership rate declining by 0.7% year over year to 63.7%, which represents a 20-year low in the homeownership rate.
“Dome’s top-down research and bottom-up sourcing processes, bolstered by our extended in-market experience, confirms that we’re in the midst of a long-term trend of increased rentals and diminished home ownership,” said Dome Chief Investment Officer, Eric D. Jones, CFA. “We believe that market conditions, such as predictable and observable demographic trends coupled with stable and growing regional economic fundamentals favor buying, fixing and selling rental properties across multiple metropolitan areas.”
ABOUT DOME EQUITIES, LLC
Dome Equities, LLC, is a New York City based private equity real estate investment firm specializing in core+, value-add, and opportunistic strategies in U.S. real estate with a focus on multifamily rental properties. Dome’s mission is to deliver investment opportunities that provide strong, stable current returns while generating long-term capital appreciation. The firm applies a disciplined investment process marrying top-down economic and demographic research with bottom-up sourcing by accessing local knowledge via an expansive, scalable network of owner/operators. Management currently employs a strategy targeting investment in the multifamily apartment market. Always seeking profit creation as a core objective, Dome acquires apartment properties below their replacement cost, implements best-in-class management practices and invests strategic capital to improve property operations, followed by the sale to a long-term owner, all within a three- to five-year period.