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Apartment Construction Boom Leaves Developers with Empty Lots

 Apartment Construction Boom Leaves Developers with Empty Lots

KIERSTEN ESSENPREIS

A notable surge in apartment construction nationwide has left many developers grappling with challenges in launching or completing their projects. This trend is exemplified in downtown Phoenix, where construction abruptly halted on the 25-story apartment complex, X Phoenix. Higher interest rates, stricter lending criteria, and stagnant rents in certain areas, spanning from California to Florida, have left property firms awaiting financing that may not materialize anytime soon. According to data from Yardi Matrix, the average timeframe between construction authorization and project commencement has extended to nearly 500 days, marking a 45% increase compared to 2019. Additionally, figures from the Census Bureau indicate a decline in multifamily building commencements, with April recording an annual rate of 322,000 units, the lowest since 2020. Some developers have encountered setbacks even after initiating construction, leading to the abandonment of partially completed properties.

 

Source: https://www.wsj.com/real-estate/developers-sit-on-empty-lots-after-historic-apartment-boom-1c0e5fe8

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