Big Developers Dabble in Apartment Market
Wall Street Journal
Some of the leading U.S. developers of malls and office properties are moving into the apartment business, where demand for new projects is stronger than any other commercial-real-estate sector.
Fueled by the decline in home ownership, the boom in apartment building is attracting commercial-property companies such as Boston Properties Inc., Mack-Cali Realty Corp., SL Green Realty Corp., Simon Property Group Inc. and Macerich Co. They all have either acquired, completed or broken ground on apartment buildings in recent months, or plan to do so next year.
The companies’ moves are helping fuel a boom in rental apartment development and investment. The Commerce Department said Tuesday that construction starts in the multifamily sector in November spurted 25.3% from the previous month. Single-family housing starts rose just 2.3%.
Many of the nation’s biggest office and retail developers are getting in the apartment game for the first time. For example, Macerich, a mall giant whose holdings include Scottsdale Fashion Square in Arizona and Queens Center, in New York, is building a 430-unit apartment tower at its Tysons Corner Mall in Virginia. The company says it also is exploring building apartment units at its Broadway Plaza mall in Walnut Creek, Calif….