Vacancy in the 105,970-unit Cincinnati apartment market posted another drop in the second quarter, falling 20 basis points to 4.7%. That rate is down 150 basis points from 12 months earlier. Class A vacancy finished the quarter at 4.2%, down 20 basis points over the quarter, while Class B/C vacancy was 4.9%, down 30 basis points from the prior quarter. July data indicate no change in the overall rate. New construction had added 6,645 units (665 per year on average) in the 2002-to-2011 time span. Net absorption kept pace, totaling 5,987 units. Cincinnati clearly has a demand for multifamily construction. Thus far in 2012, Reis reports 288 units have completed. Second quarter’s net absorption of 271 units (plus four in July) brings the year-to-date total to 885 units. With such an imbalance of demand over supply, low vacancy rates are no surprise and are in fact predicted to continue. Vacancy is forecast to finish 2012 at 4.3% and remain near that mark through 2016.
Reis reports second quarter average asking and effective rents of $738 and $704 per month, up 0.8% and 1.0% for the quarter, and 2.4% and 3.1% over 12 months. April data show 0.2% asking and effective rent increases. Reis reports Class A asking rents of $920 per month in the second quarter, up 0.8% from the first quarter, and Class B/C asking rents of $639 per month, also up 0.8%. Unlike demand, rents have performed only modestly here. Asking and effective increases averaged 1.5% and 1.4%, respectively, from 2002 to 2011. Reis is forecasting a strong year in 2012, with respective increases of 2.8% and 3.9%. Even larger gains, with both measures exceeding 4.0%, are forecast for 2014.
Cassidy Turley report urban living is “cool” again in downtown Cincinnati. Spurred by the developments taking shape downtown, such as the Banks, Horseshoe Casino, Washington Park, and the recent completion of the Great American Tower, there have been a lot of positive things to say about downtown.