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At the National Multi Housing Council Apartment Strategies Outlook Conference (NMHC) two weeks ago, a panel of industry economists made a case for the suburbs. Their argument: In the right places, suburban investment could provide the same kind of returns as the urban core. 

In January, MPF Research put out a report showing that the difference between urban and suburban performance is much narrower than expected. One key finding from the report showed that from December 2011 to December 2014, central business districts (CBDs) generally tracked 200 basis points below high-rent suburbs in terms of renewal conversion.

“There’s a key flaw in the anti-suburban argument, and it’s a simple one: Not all suburbs are the same,” said Jay Parsons, Director of Analytics and Forecasts for MPF Research in a recent press release. “Evaluating all suburbs as one group is like evaluating all football teams mashed together. If you separate winning teams from losing teams, key differences emerge.”

But pinpointing that winning suburb isn’t easy. Here are six things to look for.

1. Follow the jobs: 

This one seems so obvious that’s it’s hardly worth mentioning. Ultimately, it’s really just about the jobs. 

“This is typically an urban mantra, but most large metros have big suburban employment corridors full of white-collar office jobs,” Parsons says. “In some Sun Belt markets, there can be more jobs in the suburbs than there are downtown.”

2. Follow the infrastructure:

One of the big attractions of the urban core is that residents can often walk or, at worst, take a quick bus, subway, or bike ride to the office. While the suburbs may not offer that type of convenience, finding access to transportation is key.

“Look for good transit—either roads or public,” says Ryan Severino, senior economist and director of research of New York-based Reis. “People in apartments often have to commute a bit.” 

3. Follow the pack:

In apartment real estate, being on an island isn’t a good thing. Apartment sites near urban-like, mixed-use developments where renters can live, work, and play is a huge benefit.

“Is the neighborhood adequately served in terms of retail, restaurant, and entertainment options that help make for a desirable place to live?,” asks Greg Willett, MPF Research's vice president. “Given the urbanization of closer-in suburbs in many metros, these lifestyle offerings can be walkable just as they are in the urban core.”

4. Follow the higher home prices:

Eventually most renters will buy. Acknowledging that and finding sites close to where they may ultimately buy, could make your property attractive and extend your residents’ stay.

“Suburban renters are often more likely to eye single-family when their life stages change,” Parsons says. “Prime apartments are often located in areas where home prices are much higher than the often-cited metro median. Since most folks want to remain in or near their current neighborhoods, the right location could prolong a renter's stay until they can afford the down payment.”

5. Stay in the right markets:

If the suburb surrounds a city that’s doing well, it’s very likely to do well. MPF found that suburban strength is tied to the economic health of the parent market. In the last four years, center business districts and high-rent suburbs in economically healthier metros averaged year-over-year rent growth of 4.2% compared to 3.8% in lower-rent suburbs. In economically weaker metro areas, CBDs notched average rent hikes of 3.7%, while high-rent suburbs in those metros averaged growth of 3.0% and low-rent spots came in at just 2.5%, according to MPF

“Among the 50 largest markets, half recorded net job growth of at least 3.0% over the last six years,” Parsons says. “Suburbs of those markets recorded significantly better apartment fundamentals than suburbs of economically weak markets.”

6. Look for a price point differential between the suburban market and urban core:

For Willett, the gap between urban and suburban pricing is “a big deal.” He uses Dallas as an example. Average rents for new product in Dallas’ urban core are around $1,800. In desirable, urbanized suburbs, like Frisco, Plano, Las Colinas, and Richardson, which have job centers, freeway accessibility, light rail, and retail, restaurant, and entertainment options, rents are about $1,200, according to Willett.

“That's a 50% price difference, so there are lots more renters who make incomes that will allow them to afford the new product in suburban Dallas than in the urban core,” he says.