Developers of apartment buildings are getting back in the game, betting that the improving economy and limited new construction will provide an opportunity for success.

Multi-family housing starts in January rose 9.2 percent, according to the U.S. Commerce Department.

Investors are encouraged by the number of people between the ages of 20 and 34 — prime renting age — which is expected to grow by 5 million over the next decade, says Hessam Nadji, managing director of Marcus & Millichap.

Plus, building costs — including labor, lumber, and concrete — have all fallen over the last two years.

"Apartment REITs (real estate investment trusts) may generate the best property net-operating-income growth that they've seen in a very long time, maybe ever," says Haendel St. Juste, a REIT analyst with Keefe, Bruyette & Woods Inc.

Source: The Wall Street Journal, Dawn Wotapka (03/03/2010)