Tech sector job growth spurs multifamily construction demand in the Capital region

For being ranked 11 out of the top 25 metro markets in the North East (according to REIS) the Capital District is most certainly making noise in the world of multifamily construction projects. A huge demand in the apartment sector stemming from technology based job growth has forced the hands of local and regional developers to get off the sidelines and start tackling sources for much needed construction financing to meet the demand. Names like Tri City Management, Prime Companies, Capital City Properties, and Albany Partners LLC, to name of few, have a total of over 1000 units either built, under construction, or funded and ready to build in the next 12-16 months. With permit filings up over 30% from 2009-2010 indicating a solid trend for new development slated through 2012, some major projects have been popping up all over the region. The Woods, a 60 unit luxury community in suburban Troy leased up its first few units in May and currently have 48 of the 60 units rented long before the grand opening was announced for this November. 1 and 2 bedroom unit rents range from $1,100-$1,490 for 882-1194 s/f averaging roughly around $1.50 psf according to Tri City Management owner and builder. Prime Companies' newest project, Watersview, a 222-unit luxury community in Cohoes is currently under construction right down the road from Prime's 170 unit, Riverwalk complex set right on the shores of the Hudson River. Watersview was a product of a HUD 221 (d) 4 loan program for $30 million plus arranged by Paragon Prime Funding at highly attractive finance rates. Since premarketing began at the end of September the project has deposits on 14 units already and project doubling that number by the end of October, official lease up begins December 1. Rents will average around $1.33 psf and range from $1,175-$1,890 bolstered by an affiliation with the Marriot Execustay program. Dean Devito, a principle of Prime Companies comments "the key to our area is great site selection and strong rental demand from the state employee pool and new tech sector." Continued positive rent growth of over 65% (according to REIS) for units built after 2009 coupled with solid price per square foot rents and a rapidly expanding tech sector job pool are the key ingredients in a lucrative cocktail for developers to sip on in this emerging secondary market. The Albany MSA is a hot area to keep an eye on over the next few years as the multifamily construction sector heats up again and is posturing towards a full recovery John Bevilacqua is the New York state director of multifamily sales for Coldwell Banker Commercial, Albany, N.Y.