Publicly traded corporate landlords are reporting some of their highest margins ever, while smaller operators say rent increases are eaten up by costs.
Lydia DePillis tackles this pressing issue, featuring an assorted collection of expert opinions across the article.
…”Take Swapnil Agarwal, whose Houston-based Nitya Capital has grown swiftly to encompass 20,000 units. He says insurance premiums, payroll costs and maintenance have combined to push his expenses to $7,000 per unit this year from $5,500 in recent years.
“It’s ironic, because our net operating margins have not gone up — actually, they’ve gone down,” Mr. Agarwal said. The picture may improve as he renews leases at market rates. “Yes, the rent growth is there,” he said, “but it has to sustain there for a while because of the costs going up.”
Many midsize landlords are also in the business of acquiring, renovating and building apartments. Rising interest rates have made that much more difficult.”