SEATTLE, WA – As rent becomes more expensive, renters are starting to look for cheaper housing options outside downtown cores, prompting rent payments to rise quicker in the suburbs than in urban areas, according to a new Zillow report. For the first time in four years, suburban rents are rising quicker than urban rents.

An increase in multifamily construction has slowed rent growth across the country, with rents rising at their slowest pace in five years. The suburbs often offer larger apartments and more single-family homes for rent with more space — about 19 percent of all single-family homes in the U.S. are rentals, up from 13 percent in 2005.

In the U.S., the median monthly cost of a suburban rental is up about 2.5 percent year-over-year, while the median cost of an urban rental is up 2.3 percent. At this time last year, the median urban rental price was up 5 percent year-over-year, while median suburban rental prices were up 3 percent.

The trend is more pronounced in booming housing markets where rent affordability is worsening. Rents in the Nashville, San Francisco and Seattle metro areas are growing quicker in the suburbs than in urban areas as rising costs force renters out of the city, increasing demand in the suburbs. Over the past decade, the share of income needed for the median rent payment in the San Francisco metro has increased from 34 percent to 44 percent. In the Seattle metro, the share has increased from 26 percent to 32 percent.

Expensive coastal cities are coming off about a decade of rapidly rising rents. Years of increases have pushed urban living out of reach for many renters, who may be choosing a longer commute in exchange for cheaper rental payments. Rent affordability is a significant issue for renters across the country, and in many major metros, the share of income needed to pay rent well surpasses 30 percent.

“Because walkable urban centers close to amenities are typically a huge draw for renters, you’d expect rents to rise quicker in the city than in the suburbs — which is exactly what we’ve been seeing until very recently,” said Zillow Chief Economist Dr. Svenja Gudell. “But a handful of factors are helping turn the tables and beginning to push suburban rents up at a higher clip. These include deteriorating rental affordability in expensive urban cores; new apartments, albeit high-end ones, opening downtown compared to relatively few in outlying areas; and preferences among some renters toward the space offered by single-family homes in the suburbs. Rents themselves are still lower in the suburbs, but if demand keeps growing for suburban rentals and supply continues to lag, that will also start to change. As more formerly urban renters go to the suburbs in coming years, we’ll likely start seeing more apartment buildings and walkable amenities popping up in those communities.”

The price of an urban rental in Nashville is up 1.7 percent since this time last year, but the price of a rental in the suburbs is up nearly 5 percent, with the median price of suburban rentals nearly $500 less than an urban rental, despite many suburban rentals offering more space. Rents in Seattle are growing strongly across the metro, but the median price of suburban rentals is growing quicker than the price of urban rentals by about 2 percentage points.

In San Francisco, urban rents are down 0.4 percent since this time last year, but rents in the suburbs are up 2.6 percent. The median rent price of a suburban rental is about $350 less than an urban rental in San Francisco.

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CHICAGO, IL – Alderman Walter Burnett headlined a ceremony celebrating the grand opening of Clybourn 1200, a new mixed-income, mixed-use apartment community located in the heart of the Cabrini-Green revitalization area on the city’s north side. The ribbon-cutting for the new 84-unit apartment community that will serve families of all income levels was hosted by the development team of Brinshore-Michaels.

“Clybourn 1200 represents a perfect example of effective community engagement and collaboration,” said Richard Sciortino, a founding principal of Brinshore Development, LLC. “Our partnership with the Cabrini Local Advisory Council as well as program initiatives with City Farms, Near North Unity Program, Chicago Bee Co-Op and others resulted in a rich and diverse development.” The seven-tale high-rise will include 26 public housing units on the nearly one-acre site and features modern, dramatic architecture; green and sustainable features and impressive energy efficiency for residents in a mix of studios, one-, two-, and three-bedroom apartment homes.

“This is yet another example of the progress CHA is making with its development partners as we head toward the completion of the Plot for Transformation,” CHA CEO Eugene Jones, Jr. said. “With the delivery of these units, we are again showing the unmistakable momentum that has been made here at CHA in producing housing and retail options and other amenities people want and need in Chicago neighborhoods.”

“We are excited about the new development at Clybourn 1200; this development brings so many positive components to the neighborhood, including a day care center, which is a fantastic convenience for new residents who have children. Additionally, this development will help formerly displaced residents wishing to relocate back to community,” said Alderman Burnett.

There is a working apiary on the building’s rooftop, which is home to multiple honeybee hives being cared for by the Chicago Honey Co-op. On the ground level, 16,000 square feet of commercial space will be occupied by local businesses, including the Pleased Trails Day Care Center. On the second floor, residents will be able to delight in a perfectly landscaped deck with outdoor seating and a fireplace.

A community garden, located on the third floor, is being offered in partnership with City Farm.

Clybourn 1200’s additional green features include radiant floor heat, solar hot water, and Energy Star appliances and fixtures.  

The community will serve households with a variety of income levels, including market-rate tenants, public housing residents, and families with incomes below 80 percent of the Area’s Median Income (AMI). In a neighborhood where rents have been trending upward, Clybourn 1200 represents an vital new affordable housing resource. Located across the street from the former site of the Cabrini-Green public housing complex, Clybourn 1200 is near shopping, employment opportunities, and public transportation.

“In addition to achieving the city’s mixed-income housing goals for a prominent location, the new building has a thoughtful and functional design that complements nearby retail and residential uses and the ongoing Near North Redevelopment Initiative,” said DPD Commissioner David Reifman.

Financing for the project included $13.1 million in private equity generated from the sale of 9% federal Low Income Housing Tax Credits and $1.9 million in private equity raised from sale of Chicago Donation Tax Credits, generated from the city of Chicago’s donation of the land. Public financing includes an $8.1 million CHA loan, along with $8.1 million in Tax Increment Financing help. Additional private financing includes a $7.8 million Citibank loan.

The development team included Brinshore-Michaels, a partnership of Brinshore Development, and The Michaels Development Company, which together has collaborated on nearly 1,700 units of affordable housing in Chicago. The development team also included the non-profit organization Cabrini-Green LAC Community Development Corporation, which also has an ownership stake in the property. McShane Construction served as the general contractor. The community is being managed by Interstate Realty Management, which will ensure that it remains a long-term asset to the neighborhood. The Near North Unity Program has partnered with IRM to promote community integration.

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MOORESVILLE, NC – Lowe’s Companies announced it has entered into a definitive agreement to buy Maintenance Supply Headquarters, a leading distributor of maintenance, repair and operations (MRO) products to the multifamily housing industry, for a total transaction value of $512 million. Based in Houston, Texas, Maintenance Supply Headquarters operates 13 distribution centers serving customers in 29 geographic areas, primarily in the western, southeastern and south central U.S., with a portfolio of more than 5,300 products and value-added services for maintaining and renovating multifamily properties.

The acquisition is expected to be completed in Lowe’s second fiscal quarter, following the receipt of regulatory approval and satisfactory completion of customary closing conditions. The transaction is expected to be accretive to Lowe’s earnings in fiscal 2017.

Purchasing Maintenance Supply Headquarters is an vital step in Lowe’s strategy to deepen and broaden its relationship with the Pro customer and better serve their needs. When combined with Lowe’s November 2016 acquisition of Central Wholesalers, a prominent MRO distributor in the Mid-Atlantic and Northeast, this acquisition will substantially expand Lowe’s ability to serve the multifamily housing industry.

“Lowe’s has long served the multifamily housing industry through our Pro Services business, and we are excited about the potential to further expand our presence in this highly attractive and growing customer segment,” said Richard D. Maltsbarger, Lowe’s chief development officer and president of international. “Together, Maintenance Supply Headquarters and Central Wholesalers will expand our capabilities in serving this key segment while strengthening our platform for future growth with enhanced product and service offerings for MRO customers.”   

Upon the close of the Maintenance Supply Headquarters transaction, Lowe’s combined multifamily MRO business will include 16 distribution centers in attractive regions throughout the nation generating more than $400 million in annual sales.

Richard “Rusty” Penick, co-founding partner and CEO of Maintenance Supply Headquarters, added, “We are thrilled to become part of the Lowe’s family and have high regard for the team and the company’s leadership in the home improvement industry. Our partnership with Lowe’s marks an exciting next step in the evolution and growth of Maintenance Supply Headquarters. Like Lowe’s, our team shares a commitment to deliver truly exceptional service for our customers, and over the past 10 years, we have been privileged to serve many of the nation’s top multifamily property management companies and their communities. We look forward to the new opportunities ahead.”

Founded in 2006, Maintenance Supply Headquarters’ broad product offering includes appliance, plumbing, HVAC, lighting, hardware, electrical and other products for maintaining and renovating multifamily properties, as well as services such as renovation project support, custom fabrication and educational classes.

Michael A. (Mike) Tummillo, a 13-year Lowe’s veteran and recently appointed senior vice president of Lowe’s pro sales organization, will oversee Maintenance Supply Headquarters and Central Wholesalers. He will also lead Lowe’s Pro Services business and Alacrity Services, a leading supplier of home restoration and repair services. Tummillo is responsible for deepening and broadening Lowe’s relationship with Pro customers to better serve their needs.

Goldman Sachs & Co. LLC is acting as financial advisor to Lowe’s, while Hunton & Williams LLP is acting as legal advisor. Crutchfield Capital Corporation is acting as financial advisor to Maintenance Supply Headquarters, while Porter Hedges LLP is acting as legal advisor.

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