The Endurance of U.S. Rental Housing Investments
By Tim Wang and Julia Laumont, Clarion Partners
Macroeconomic, demographic and financial factors will continue to buoy US housing rentals, especially in the Sun Belt and suburbs, making them an attractive proposition for investors.
Over the past decade, US multifamily has been among the most highly sought-after sectors by institutional real estate investors due to its necessity characteristic, the underlying strength of property-level fundamentals and high risk-adjusted total returns. It has become an integral part of commercial real estate investment portfolios with a weighting of 29.2% in the NCREIF Open-end Diversified Core Equity Index (ODCE) in Q1 2023. Clarion Partners believes that well-located, high-quality rental housing will continue to be a strong performer over the long term due to a variety of macroeconomic, demographic and financial factors.