Hi Brittany,
Great question! I think I understand the question but let me ask you a few clarifying questions.
1. How would you invest in an area with the knowledge that a luxe apt community is coming soon? Do you mean what asset types would you consider or how/if you should invest more capital into a deal you already own?
2. How can you take advantage of the new construction? Do you mean this as how can an investor be more competitive when new units come in?
If you already own real estate in the area, this could potentially be a good sign. When newer apartments are built, generally, the rents come in higher and can also spark an increase in and around the neighborhood. Do you feel confident that this project will be successful and that the dev/sponsor has selected an area with job, population and rent growth? If the answer is yes, more incoming renters give you a larger pool of renter candidates once your lease comes available.
What market are you referring to? In some markets, new deals offer deep concessions to get renters in the door. If those rents are lower than yours or a deal you are considering, that could be problematic during that first year of the lease-up phase. Once that new renter gets their renewal letter, their rent will increase, sparking move-outs and more renters to capture at other lower priced locations. Deep concessions typically occur in markets where several new deals are competing at once for new renters.
Is any of this helpful?
