Demand drivers are the factors that attract and retain renters in a multifamily submarket — jobs, transit, schools, amenities, lifestyle factors. Strong demand drivers support rent growth and tight cap rates.
Multifamily demand drivers include: employment centers within commute distance, transit access (metro rail, major corridors), school quality, neighborhood amenities (restaurants, retail, parks), crime rates, and broader lifestyle factors. Analyst framework: identify demand drivers, assess their durability, forecast their evolution.
LA multifamily demand drivers vary by submarket. Westside: tech employment, coastal lifestyle. Hollywood: entertainment industry, transit, walkability. Valley: affordability relative to Westside, major employers. Koreatown: cultural community, transit, central location.
From the Sterman LA Multifamily Glossary — defined the way a broker with $1.41 billion across 254 closed transactions actually uses these terms.
Michael Sterman, Senior Managing Director Investments, Marcus & Millichap.
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