Multifamily Sector Carries Momentum into New Year
Wall Street Journal reports: Driven by several of the unique consequences of the current economic environment, the multifamily property sales investment market is heating up and has nearly reached its previous 2007-peak along many parameters. This is good news for sellers and current owners of multifamily properties, according to the Wall Street Journal, as well as developers of such properties. However, it is less so for those hoping to take advantage of the sector as investors.
The Journal indicated that due to the elevated number of foreclosures pushing former-homeowners into the rental market, and a depressed number of new units coming online from development, renter demand is approaching a record high. Investors have taken notice of the potential secure revenue offered by the multifamily sector, and paired with record-low interest rates “that have made borrowing less expensive,” competition for purchasing multifamily properties is intensifying and branching out beyond the US’ primary markets.
The Journal provided one stark example of just how far pricing has rebounded for multifamily properties in numerous markets. According to Real Capital Analytics’ transaction data, “TIAA-CREF paid $62 million for the 261-unit Newbury Commons in Stamford, Conn. The purchase price was 65% above what Seaboard Properties paid in February 2009,” the previous owner's purchase price.
For more on this exciting trend in the multifamily sector, please see the full article on the Wall Street Journal’s site.
View the full article on Wall Street Journal: Multifamily Sector Carries Momentum into New Year
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Posted by: Nina Turner