The University of St. Thomas Shenehon Center recently issued its February Residential Index report that addressed some of the rental activity in our local market.
“There is another major trend that has been developing since the beginning of the recession in 2008. On a national and local basis we have seen the formation of companies and funds such as Blackstone’s Invitation Partners and American Homes 4 Rent that are buying large numbers of single family homes for investment purposes…This is a trend that is not only occurring in the core cities of Minneapolis and St. Paul, it is happening all across the Twin Cities metro area. The total number of single family homes being rented in suburban neighborhoods has increased from 12,000 in 2000 to over 28,000 in recent years according to data compiled by the Metropolitan Council. Of the 93 cities that were tracked all but 32 saw their single family rentals grow by at least 100% between 2000 and 2013.”
It is not surprising that the one to four family rental market has seen demand with lower interest rates and steadily increasing rents over the past several years. As a recent review of the market by the Star Tribune indicated, as of the end of the 4th quarter 2016, the rental market remained strong and stable with below 5% vacancy rates throughout the Twin Cities Metro Area.
|
Location |
Unit Type |
Units Surveyed |
Units Vacant |
Average Rent |
Vacancy Rate |
|
Twin Cities Metro Area |
Total |
133,265 |
3,652 |
$1,096 |
2.74% |
|
NW, W, SW Suburbs |
Total |
51,556 |
1,640 |
$1,091 |
3.18% |
|
Minneapolis |
Total |
23,307 |
736 |
$1,296 |
3.16% |
|
East Suburbs |
Total |
20,969 |
538 |
$1,035 |
2.57% |
|
South of River Suburbs |
Total |
18,877 |
428 |
$1,031 |
2.27% |
|
St. Paul |
Total |
14,481 |
243 |
$1,071 |
1.68% |
|
North Suburbs |
Total |
10,237 |
237 |
$942 |
2.32% |
Source: Apartment Trends, a publication of Marquette Advisors
We have and continue to be strong proponents of the investor owned residential real estate market in the Minneapolis/St. Paul Metro Area. Each month, we are accepting applications and doing new loans on one to four family residential rental properties. It’s a niche lending area that we are proud of and take efforts to lend to a variety of investors from student housing operators to condo rentals to traditional rental operators.
If you are a local investor, Security Bank & Trust Co. Minnesota will work to understand your cash flow, your goals, and is committed to deliver superior, timely service with certainty in terms so that your company can focus on its leasing and real estate operations.
We have invested in expert people, systems, and industry knowledge that make us a market leader in a field often dominated by very large banks. If your Minneapolis/St. Paul Metro Area closely-held business, nonprofit organization, or real estate company could benefit from a bank that delivers specifically for you, please give us the opportunity to review your banking needs. We are committed to making our clients successful. Your success is our business!
Security Bank & Trust Co. Minnesota is a Member FDIC and Equal Housing Lender.