Builders are focusing on luxury apartments like they never have before. In 2015, a whopping 75 percent of large multifamily rental developments completed were high-end rentals, rentcafe.com reports. As recently as 2012, that number was only 46 percent. Additionally, data from the first quarter of 2016 suggests the percentage of high-end apartments as a total of all apartments completed is only going to grow. The share had already risen to 79 percent through the first three months of 2016.
And that’s not all; in 14 urban areas across the country there were no new affordable rentals built at all. Places like San Antonio, San Jose, Nashville, Milwaukee, and Fort Lauderdale experienced 100 percent of their new apartments constructed and completed as high-end units in 2015.
Meanwhile, Charlotte, N.C., saw the highest increase in their activity of high-end apartment construction as it increased 950 percent from 2012 to 2015. In 2012, the metro had two high-end properties. By the end of 2015 there were 21. Atlanta saw a similarly high increase at 867 percent, going from three high-end properties to 29. Overall, 10 cities saw an increase in the number of high-end apartment properties of at least 350 percent between 2012 and 2015.
The Southwest and the Mid-Atlantic saw the highest percentages of high-end apartment buildings out of the total number of apartment buildings completed in 2015 at 88 percent each. The Pacific Northwest had the lowest share at 61 percent.
As more people choose to rent instead of buy, such as empty-nesters, builders saw a market for more sophisticated rental options, and it seems to be paying off. At the end of 2015, 95.8 percent of all high-end rental properties were occupied.