Multifamily Investors Having "Feeding Frenzy" in 90210
Bloomberg - Businessweek reports: As the multifamily sector quickly becomes investors’ preferred property type, Bloomberg’s Businessweek recently detailed the growing activity being reported in one of Los Angeles’ most important submarkets: Beverly Hills. Though properties seldom come to market in Beverly Hills and other affluent Los Angeles suburbs, several owners are taking this unique period in the cycle to lure wealthy individuals to buy within the desirable market.
And investors are definitely expressing their interest, even accepting lower yields to get in to the Beverly Hills multifamily market at this early point in the new cycle. On a recent 24-unit multifamily trade, located near the Beverly Hills Four Seasons Hotel, a high net-worth investor accepted a 4.5% initial annual cap rate, while, according to data aggregated by Real Capital Analytics, the national average cap rate for multifamily properties slipped to 6.6% in the second half of 2010. With activity ramping up over the first quarter, the national cap rate has dipped even lower since.
Businessweek went on to chronicle other properties that have traded recently in Beverly Hills with cap rates below the national average, and described some of the factors that are driving demand in the exclusive Los Angeles submarket. Weaker single-family demand and a lack of new development of multifamily properties have pushed up rental occupancy over the past year, especially in desirable locations such as Beverly Hills.
View the full article on Bloomberg - Businessweek: Multifamily Investors Having "Feeding Frenzy" in 90210
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Posted by: Nina Turner