Renters' market strong in Lincoln
They’re everywhere. They sit in front lawns and hang from building walls.
Signs advertising apartments for rent permeate Lincoln.
The renters’ market in the city isn’t at full strength, several local property managers said. But it’s far from rock bottom.
An oversupply of apartments a few years ago left many established complexes with lots of vacancies. There was too much room for too few tenants.
Today, the market is recovering. Some complexes are seeing increased success, while others are still making a comeback.
“In my limited experience, it’s not as busy as it has been,” said Mary Joe Bousek, former president of Real Estate Owners and Managers Association in Lincoln. “Maybe a little more than last year. But in the past, I was just swamped during the summers.”
REOMA represents more than 7,000 residential units in the Lincoln area, and Bousek still shows properties around the city. Some are houses that have been converted to apartments. Others are small complexes built especially for renters.
Demand varies from year to year, she said, but it isn’t breaking records this summer.
And renters are reaping the benefits.
Andrew Lewis is a senior at the University of Nebraska-Lincoln. He’s been hunting for an apartment all summer. Most three- to four-bedroom duplexes he’s viewed require an individual rent portion of about $250. A few years ago, he paid $275 for a much smaller apartment with roommates.
“It’s nice,” he said. “Any time you can save money these days, you’ll take it.”
The apartment he finally selected ended up costing him and his roommates $250 each — it was bigger and included a washer and dryer.
Misperceptions caused the over-construction of complexes, current REOMA president Bill Wood said. Around 2004, in-state and out-of-state developers were looking for university towns with low vacancies. With interest rates down and credit standards loosened, the field was ripe for construction.
If they built new complexes, people would come, they thought.
“Problem was,” Wood said, “each one thought they were the only one out there building large projects. Actually there were six to 10 — or more — out there building.”
The result wasn’t good. Some REOMA complexes had 20 percent to 50
percent vacancy rates on the outside edges of Lincoln, Wood said. And some downtown apartments had vacancy rates of 12 percent to 14 percent. A normal vacancy rate downtown is 3 percent, he said.
Owners and managers were forced to lower rents, and the effects can be seen today. Larry Wakefield is the owner of Wakefield Management Services in Lincoln. He manages a variety of apartments, townhouses and homes.
In the past, he charged $445 for a two-bedroom apartment. Today he charges $395. He also manages houses that used to be for sale, but now have “For Rent” signs in the front lawns.
“A lot of investors have tried to put some work into a property to get a high price,” Wakefield said. “They try to sell it for a while, and then they have to put it up for rent because they can’t sell.”
Other complexes have a different story. Dave Noecker, vice president of Commercial Investment Properties in Lincoln and Omaha, said vacancies have actually decreased in recent years. CIP manages more than 3,500 apartments in Lincoln, he said, many of which have new and improved amenities.
Rather than dealing with the complexities of home ownership, tenants are moving into apartment complexes at high rates, Noecker said. Many of the facilities come with in-home washers and dryers, walk-in closets and fitness centers.
“It’s kind of a one-shop stop,” he said. “A lot of CIP properties are newer, which gives us the opportunity to make those changes.”
These days, people are looking for good maintenance and quality amenities, he said. If properties provide those things, filling space isn’t a problem.
“If you’re in the average, it can take a long time to sell or rent,” Wakefield said. “If you have nicer stuff, if you can give more amenities, you’re better off. But it’s hard for owners to afford everything outright.”
Water rates have increased and natural gas prices have risen, so offering dozens of amenities isn’t always easy, especially for smaller property owners.
For now, REOMA and its president expect to see more “For Rent” signs in front lawns. The busiest time of the year doesn’t hit until August, when many college students hit the market.
But with construction down and demand on the rise, Wood said, the market is on the right track.
“It might take several years to sop up all this extra supply,” he said. “Eventually you’re going to see building commence again, but not on the same scale as before.”
Reach Michael McHale at 473-7254 or at mmchale@journalstar.com.
Signs advertising apartments for rent permeate Lincoln.
The renters’ market in the city isn’t at full strength, several local property managers said. But it’s far from rock bottom.
An oversupply of apartments a few years ago left many established complexes with lots of vacancies. There was too much room for too few tenants.
Today, the market is recovering. Some complexes are seeing increased success, while others are still making a comeback.
“In my limited experience, it’s not as busy as it has been,” said Mary Joe Bousek, former president of Real Estate Owners and Managers Association in Lincoln. “Maybe a little more than last year. But in the past, I was just swamped during the summers.”
REOMA represents more than 7,000 residential units in the Lincoln area, and Bousek still shows properties around the city. Some are houses that have been converted to apartments. Others are small complexes built especially for renters.
Demand varies from year to year, she said, but it isn’t breaking records this summer.
And renters are reaping the benefits.
Andrew Lewis is a senior at the University of Nebraska-Lincoln. He’s been hunting for an apartment all summer. Most three- to four-bedroom duplexes he’s viewed require an individual rent portion of about $250. A few years ago, he paid $275 for a much smaller apartment with roommates.
“It’s nice,” he said. “Any time you can save money these days, you’ll take it.”
The apartment he finally selected ended up costing him and his roommates $250 each — it was bigger and included a washer and dryer.
Misperceptions caused the over-construction of complexes, current REOMA president Bill Wood said. Around 2004, in-state and out-of-state developers were looking for university towns with low vacancies. With interest rates down and credit standards loosened, the field was ripe for construction.
If they built new complexes, people would come, they thought.
“Problem was,” Wood said, “each one thought they were the only one out there building large projects. Actually there were six to 10 — or more — out there building.”
The result wasn’t good. Some REOMA complexes had 20 percent to 50
percent vacancy rates on the outside edges of Lincoln, Wood said. And some downtown apartments had vacancy rates of 12 percent to 14 percent. A normal vacancy rate downtown is 3 percent, he said.
Owners and managers were forced to lower rents, and the effects can be seen today. Larry Wakefield is the owner of Wakefield Management Services in Lincoln. He manages a variety of apartments, townhouses and homes.
In the past, he charged $445 for a two-bedroom apartment. Today he charges $395. He also manages houses that used to be for sale, but now have “For Rent” signs in the front lawns.
“A lot of investors have tried to put some work into a property to get a high price,” Wakefield said. “They try to sell it for a while, and then they have to put it up for rent because they can’t sell.”
Other complexes have a different story. Dave Noecker, vice president of Commercial Investment Properties in Lincoln and Omaha, said vacancies have actually decreased in recent years. CIP manages more than 3,500 apartments in Lincoln, he said, many of which have new and improved amenities.
Rather than dealing with the complexities of home ownership, tenants are moving into apartment complexes at high rates, Noecker said. Many of the facilities come with in-home washers and dryers, walk-in closets and fitness centers.
“It’s kind of a one-shop stop,” he said. “A lot of CIP properties are newer, which gives us the opportunity to make those changes.”
These days, people are looking for good maintenance and quality amenities, he said. If properties provide those things, filling space isn’t a problem.
“If you’re in the average, it can take a long time to sell or rent,” Wakefield said. “If you have nicer stuff, if you can give more amenities, you’re better off. But it’s hard for owners to afford everything outright.”
Water rates have increased and natural gas prices have risen, so offering dozens of amenities isn’t always easy, especially for smaller property owners.
For now, REOMA and its president expect to see more “For Rent” signs in front lawns. The busiest time of the year doesn’t hit until August, when many college students hit the market.
But with construction down and demand on the rise, Wood said, the market is on the right track.
“It might take several years to sop up all this extra supply,” he said. “Eventually you’re going to see building commence again, but not on the same scale as before.”
Reach Michael McHale at 473-7254 or at mmchale@journalstar.com.
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