Oversupply of new construction fears in MF

[Jason Merchey]

One word most MF sponsors and investors don't love is oversupply. 

I saw it was referenced  here  as one of the upcoming possible threats to MF supply and demand and returns and such.

Any thoughts on the veracity of this claim??

Do you think sponsors are in agreement with this prediction?

[Brian Burke]

I think that will be a problem in some areas. Not a problem at all in other areas. It most likely won't be as bad as it sounds, either. Many of these units will never see the light of day because financing will be a challenge for those projects that don't already have it. These numbers come from approved permits, not from number of units actually under construction. A more important metric is the construction/absorption ratio. This measures how many units get leased relative to the number constructed. And looking at that ratio on a submarket basis tells a far better story than looking at a National or state statistic.