The verdict is in. Suburban multifamily rental developments come out ahead of urban developments again. Suburban rental units outnumber urban rental units, either inside or outside of city limits.
This is counterintuitive and confusing to many. The suburbs are typically regarded as single-family homes in subdivisions. Cities are typically regarded as concentrated population.
Older cities in the US follow a typical design. They are centralized with a high concentration of activity in a business district. Public transportation works efficiently in this design. Suburbs are at the perimeter of the city limits.
Younger cities, however, don’t follow this design and have become more suburban-like. They don’t tend to have the dense concentration and are consequently, more spread out. Residents prefer to drive themselves rather than use public transportation.
Regardless of location, actual rents are similar. This is contributed to new high-end class A properties in the most desirable neighborhoods. Since 2010, the average concentrated business district (CBD) rent has grown 34 percent. Average suburban rent has grown at 28 percent in that same amount of time.
Multifamily apartment development growth in number of units and rental income continues to impress, regardless of the setting, suburban or urban.