MINNEAPOLIS, Jan. 30, 2006 - Real Estate Investment Brokerage Company, the nation's largest real estate investment brokerage firm, recently released its National Apartment Research Report for 2006, which indicates the Minneapolis-St. Paul apartment market will experience stronger apartment operations due to healthier employment growth.

Also included in the report is the firm's annual National Apartment Index (NAI), a snapshot analysis that ranks 42 apartment markets based on a series of 12-month forward-looking supply and demand indicators. Minneapolis-St. Paul drops eight positions this year to No. 28.

"A decline in vacancy and an increase in effective rents will yield a modest gain in gross revenues for the Minneapolis-St. Paul apartment market in 2006, marking the second consecutive year of growth," comments Gary R. Lucas, managing director of and regional manager of the Minneapolis office. "With a strengthening economy and demographic trends elevating property performance, investors are starting to show greater interest in local assets, which is pushing the median price per unit higher."

Following are some of the most significant aspects of the Minneapolis-St. Paul Apartment Research Report:

• With steady demand expected to trim vacancy, apartment rents are set to rise in 2006.
  
  Asking rents are expected to climb 2.4 percent to $920 per month, with effective rents forecast to advance 3.7 percent to $863 per month.
  
  

• A 30 basis point decline in the vacancy rate to 6 percent is forecast for Minneapolis by year-end 2006.
  
  Demand generators, such as a modest level of job growth and the projected formation of 24,000 new households annually from 2004 to 2009, will sustain a healthy apartment market.
  
  

• Employers in Minneapolis are expected to add 39,000 jobs in 2006, up from 11,000 positions last year.
  
  Approximately 11,000 new jobs are forecast in the educational and health services, and professional and business services sectors.
  
  

• Builders are expected to complete 1,200 apartments in 2006, the same number delivered in 2005.
  
  As the new year began, approximately 1,600 apartment units were either under way or planned, compared with 15,000 condos in the pipeline.
  
  

• Investors looking to buy properties in the Midwest should note that yields in Minneapolis are higher than other major metros, including Chicago and Detroit. 
  
  Eden Prairie is starting to become an active investment location, as fundamentals are strong due to the city's proximity to major transportation corridors and solid employment base.
  
  

Orange County (Calif.) claimed the top spot in the 2006 NAI, surpassing last year's leader, Riverside-San Bernardino (California's Inland Empire). The region's median home price of more than $700,000 makes Orange County one of the least affordable housing markets in the country, which will keep renter demand at high levels. Fort Lauderdale occupies the No. 2 position due to robust job growth and low vacancy. Las Vegas moved up one spot to No. 3, supported by strong condo conversion activity and declining vacancy. San Diego fell two places to No. 4, and New York City-Manhattan climbed four positions to complete the top five. Typically the bottom MSAs in the NAI are markets with above-average vacancy or weak labor markets.