Small Apartment Buildings Keeping Pace with Rise in Broader Multifamily Market
Investor's Business Daily reports: Helped by recovering fundamentals—such as rising occupancy rates—as well as by improved credit availability over the past year, apartment sales are being driven higher across the board, even including the smallest properties. Apartment buildings with up to four units appeal to a distinct class of buyers, often local private investors, and compete with an oddly diverse pool of asset types, such as multifamily residential homes among others.
Yet small apartment buildings may be joining other, larger and institutional-grade multifamily properties in leading the commercial real estate sector’s recovery. Market analysts interviewed by Investor’s Business Daily cited that as homeownership rates fall, rents will increase by 5-6% this year on increase rental demand. This has prompted many investors to become active in the apartment sector. Real Capital Analytics (RCA) recorded $2.0 billion in apartment portfolio sales in February 2011 alone, a total that was up by 50% year-over-year. Demand for apartment properties is strongest in the nation’s top investment markets, including Washington, DC, Boston, Orange County, and several markets in Florida.
Not coincidently, rental demand is highest in markets where job creation has resumed after the downturn. For those interested in the smallest multifamily assets, these markets have the greatest potential for a rise in value over near-term future.
View the full article on Investor's Business Daily: Small Apartment Buildings Keeping Pace with Rise in Broader Multifamily Market
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Posted by: Nina Turner