Affordable Housing | Maryland Market Update

Affordable Housing Investments & The Maryland Economy

Maryland Market Rate vs LIHTC (PPU)

Maryland’s multifamily fundamentals continue to outperform as volume and pricing increase steadily through this cycle. Investors are attracted to markets such as Baltimore where cap rates are higher than in coastal neighbors Washington, D.C. and Philadelphia. As yields in core markets have been squeezed, average cap rates in Maryland have ranged between 6.0% to 6.3% over the past five years. Maryland follows the national trend of increasing demand for Low-Income Housing Tax Credit (LIHTC) multifamily assets as they currently have an average sales price per unit approximately 44% less than market rate properties. Investors nationwide continue to rally around the ability to achieve market rate yields, or better, while investing in high quality assets at a deep discount to replacement cost.  Maryland is the 19th most populated state in the U.S., with more than 6.1 million residents. Situated in the center of the Northeast Corridor, one of the nation’s busiest commercial corridors, Maryland is strategically located within an overnight drive of a third of the U.S. population. The state is bisected by the expansive Chesapeake Bay and crisscrossed by five major interstates and three commuter rail services. Maryland is home to one of the nation’s leading school systems, top-notch healthcare services, and a variety of world-class museums, cultural attractions, and sporting events. Boasting a median household income of over $81,400, Maryland’s skilled workforce is also one of the most highly educated in the U.S., with approximately 40% of residents earning a bachelor’s degree or higher. 

Maryland’s business-friendly culture is attractive for businesses of all sizes—while boosting the state’s affinity for growing innovative industries, including aerospace & defense, advanced manufacturing, agribusiness, biotech & life sciences, distribution & logistics, financial services, government, and IT & cybersecurity. There are 11 Fortune 1000 companies headquartered in the state, including Host Hotels & Resorts, Legg Mason, Lockheed Martin, Marriott International, McCormick, T. Rowe Price, and Under Armour.

 

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