Apartment construction heats up in Folsom, other markets
Apartment construction in the Sacramento region is still lagging relative to both demand and other markets.
The most recent report from Yardi Matrix, for example, found newly completed apartments still accounted for less than 1 percent of the inventory overall.
But in certain preferable submarkets, such as Folsom, multifamily developers are ramping up. There, the demographics suggest building a new project is economically justifiable because residents can afford the rents the developer wants to make the project profitable.
In Folsom, about 1,000 new units are either under construction or entitled, many of them in an area near the Palladio retail and office complex visible from Highway 50.
Geoff Brown, CEO at Roseville-based USA Properties Fund Inc., said at least the first phase of 293-unit Talavera Ridge should start filling up in about a year’s time, with leasing to start next spring.
Nearby, DesCor Builders is building in phases for The Pique, a 327-unit project slated for total completion in 2021. Elliott Homes is the developer for that project, while USA Properties is both developer and builder for Talavera Ridge.
Both projects are market rate, a label that typically means fairly upscale in recent years, as developers say they need rents affordable to wealthier residents in order to make projects work.
But with more “luxury” projects coming to market, Brown said, he’d need another year of perspective to know whether every project is equally viable.
“I believe there’s still plenty of demand because we just have such a housing shortage in the state,” he said. “But you don’t assume anything.”
While demand is still rising as the economy continues to grow, he said, construction costs are also rising. USA Properties is also developing a 300-unit project in Roseville, and has four more in other parts of California breaking ground this summer.
Roseville, like Folsom, is considered a more affluent submarket.
Link to article: Apartment construction heats up in Folsom
Ben van der Meer | Staff Writer | Sacramento Business Journal
June 21, 2018