The top-tier assets are seeing a slowdown in rent growth, while a trickle-down effect has given Class C assets a big boost.
Rent growth for Class C properties is increasing nationally at an average of 4.3 percent, while Class A rents grew 3.2 percent, down from 4.9 percent a year ago, a new Axiometrics report shows.
And the top-tier metros are starting to slow as well. Boston and San Francisco rent growth rates are both below the national average after consistently ranking in the top tier for the last two years.
Boston’s rent growth rate decreased during the first quarter of 2013 falling to 2.9 percent this February, down from 15.9 percent a year ago. In San Francisco, the biggest decline occurred in Class A properties, with rents 2.5 percent lower this year compared to last year. But Class C assets in San Francisco are seeing the opposite: their revenue growth rates increased 12.1 percent.
Rent growth across all metros and asset types remained steady in February at about 3.5 percent, the lowest rate since August 2010.
Nationally, occupancy is strong at 94 percent, up 35 basis points from last year, and is expected to increase to 94.9 percent by the end of the year.