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February 2, 2014

Multi-family development in Norman outstrips University of Oklahoma enrollment

NORMAN — Multi-family is still a seller’s market, said Mike Buhl, Commercial Realty Resources, whose 2013 apartment report came out this week.

“Following the trend of 2012, multi-family in Oklahoma rose to astronomical levels in 2013,” Buhl said.

In Moore and south Oklahoma City, there were numerous planned developments and construction starts, even before the May 20 tornado that destroyed around 1,100 homes.

“As of the end of November, the city of Moore reported that only 335 permits were issued for new homes in the storm-damaged areas, which has created more demand for permanent-type housing in many of the apartment communities,” he said.

Buhl reported that a “host of new data shows a surge in development activity in the multi-family sector.”

Developments under construction or “in the pipeline” in the Cleveland County area include several projects in Norman and Moore.

“There’s a tremendous amount being built in Norman. In Moore and north Norman, there’s a lot of new development occuring,” Buhl said.

There are indications that both tenants and investment markets are driving the market.

“Multi-family construction is booming because vacancy is down and rents are rising, making investments in apartments particularly attractive. Despite the optimism, though, there is concern of overbuilding,” Buhl said. “There is such a pent-up demand from investors to buy apartments that it’s hard to tell if the demand for new units is being driven by investors or tenants.”

The University of Oklahoma is showing a slight decrease in enrollment, an indication that the need for more apartments isn’t the sole driver behind the market growth.

“The development that is occurring in Norman doesn’t match the statistics coming from the university,” Buhl said.

“According to Institutional Research and Reporting from the University of Oklahoma, Norman on-campus enrollment for fall 2013 totaled 23,944, a minus 0.8 percent change from 24,144 in fall 2012 and only slightly better than the 23,850 for fall 2011. New freshman enrollment was minus 2.1 percent between fall 2012 and 2013. Yet, there are 1,928 beds that have been added or planned for the Norman market,” he said.

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