Many downtown luxury apartments sit empty

USA Today reports:

Apartment building owners are struggling to rent many of the luxury units that have flooded downtowns across the country in recent years even as a relative shortage of multifamily homes in the suburbs has driven up rents.

Since 2012, the nation’s supply of apartments has swelled 16.6% in central business districts and 13.5% in “secondary core” areas surrounding the downtowns, but just 5.5% for mid-priced suburban units, according to real estate research firm CoStar.

The downtown building frenzy has been well-publicized as developers cater to Millennials, among other age groups, who have streamed into revitalized cities to be closer to amenities, nightlife and a car-free lifestyle. The CoStar data, however, shows that builders may be putting up too many apartments — most of which are at the high end of the market — in the urban hubs and not enough in outlying areas.

Over the past four years, the vacancy rate in downtowns and adjacent districts has climbed from 3.4% to about 5.5%, CoStar figures show.

The supply of square footage.