1Q19 Witten Advisory Excerpt: Total 5+ starts the (including a few condos) are holding in the mid-300Ks, but easing a bit. To be candid, we’ve been expecting apartment starts to slow down for a few years now, but that trend has not materialized, yet. We’ve seen data on rampant cost increases (especially around labor) for years now. Our developer clients and friends talk about how hard it is to get a deal done today. In fairness, new apartment starts have pulled back somewhat from their peak in 2016. But, there hasn’t been a big drop-off. A major reason that starts haven’t slowed is that profit margins remain attractive in many markets. Development spreads over cap rates have moved from amazingly wide profit margins to more normal margins, so no shutdown in production.