@article {Fitzgerald68, author = {Mark Fitzgerald and Chenchao Zang and Will McIntosh}, title = {Multifamily Development: Can You Always Lease It Up?}, volume = {45}, number = {7}, pages = {68--79}, year = {2019}, doi = {10.3905/jpm.2019.1.097}, publisher = {Institutional Investor Journals Umbrella}, abstract = {Large institutional investors continue to view multifamily real estate favorably and raise their allocations to this sector. It is commonly perceived among institutional investors that multifamily{\textemdash}and multifamily development in particular{\textemdash}is a safer investment relative to other property sectors, a common refrain being {\textquotedblleft}you can always lease it up.{\textquotedblright} In this article, the authors attempt to validate this statement by examining the distribution of lease-up terms from initial lease-up to stabilization for multifamily developments delivered in the United States between 2008 and 2018. In addition, they investigate the impact of the length of the lease-up period on effective rents. Unfortunately, they do not have underwritten projections for each development to compare with subsequent performance as a mechanism to determine an investment{\textquoteright}s success. Despite this gap in the available data, the authors generally find support for the conventional wisdom; most developments are able to lease-up in a relatively expedient fashion, no matter the position in the economic/business cycle. However, effective rent change over the lease-up period varies significantly by point of cycle and lease-up term and is an important factor in the investment performance of multifamily developments.TOPIC: Real estateKey Findings{\textbullet} Multifamily development is considered lower risk by many investors, relative to other property sectors, as you {\textquotedblleft}can always lease it up.{\textquotedblright}{\textbullet} Our research confirms this{\textemdash}relatively expedient lease-up is achieved across markets, vintage, property size, etc.{\textbullet} Effective rent growth, on the other hand, is more sensitive to these factors, and varies significantly by lease-up term.}, issn = {0095-4918}, URL = {https://jpm.pm-research.com/content/45/7/68}, eprint = {https://jpm.pm-research.com/content/45/7/68.full.pdf}, journal = {The Journal of Portfolio Management} }