In the past year, any real estate conference held in the nation’s capital had the obligatory lovefest for Washington, D.C. fundamentals, pointing out the astronomical job growth, rising rents, shrinking vacancies, and tumbling cap rates in the city. Earlier this week, at the Urban Land Institute's Washington Real Estate Trends Conference, a session on the future of multifamily wasn't much different. But there was acknowledgement of some local market risks as well as a broader look at the national picture.

Maybe that's partially because two of the apartment owners on the panel were from major national firms not based in Washington, D.C. Chicago-based REIT Equity Residential’s Chief Investment Officer Alan George said the company was seeing mid- to high-single-digit rent growth across its portfolio, with markets such as Boston and New York showing signs of strength. "The Southeast and Southwest are lagging in certain markets," George added.

Boston-based Berkshire Property Advisors Chief Investment Officer David Olney said his company is also seeing positive net growth across the country. The problem is that some markets have farther to go to reach their previous highs. For instance, he says Atlanta has seen strong year-over-year growth but hasn't approached its previous high. "What's been most surprising is the speed at which we’ve gone through the cycle," Olney added. 

That's definitely been the case in D.C. "We’re definitely seeing the market roaring back since last spring," says Grant Montgomery, a vice president at Alexandria, Va.-based research firm Delta Associates.

This growth has not gone unnoticed by investors across the country, with lots of capital clamoring for apartment properties and land in the region. Equity and Berkshire have taken different approaches to securing assets: Berkshire has been buying notes and partnering on development deals, while Equity has developed and bought existing assets, such as the Dumont condo project (now known as 425 Mass) in the city. Moderator Jim Butz, CEO of McLean, Va.-based Jefferson Apartment Group, missed out on the Dumont deal, but used the money he would have spent on it to start buying land. 

All of those tactics make sense when rents are rising, according to George. "There are really no bad strategies," he said. "The guy buying in Louisville and financing for 10 years will make money."

Despite the sunny outlook around the country, Butz asked the panelists several times if they were concerned about the Washington, D.C., area becoming overheated. Right now, the answer is still no. But that could change. Montgomery pointed out that, in the first quarter of 2011, 4,201 Class A apartment units were stared in the area. In 2009, there were 16,000 units in the 36-month pipeline. Now, that number is up to 27,000. Approximately 13,000 of those are under construction. “We can't continue to keep building 4,000 units a quarter," Montgomery said.

Meanwhile, both George and Olney acknowledged overbuilding was an issue but didn't seem to be too concerned. "Pent-up demand will lead to strong growth in the near term," said Olney, who said he'd invest in the Mid Atlantic in 2011.

George expected two more years of growth before encountering any oversupply. "I feel great about D.C., and I understand there could be bumps by 2013," he says.