RCA in the commercial property press:

AvalonBay Closes First REIT Deal of the Year

Housing Finance News reports: It took five months, but the first acquisition of the year by a multifamily REIT recently closed when AvalonBay purchased the Verona Apartments in Bellevue, Wash., on May 8.

The $33.1 million deal represented a steep discount, 45 percent below the company’s estimated replacement cost of the community, or what it would cost to build it today. The seller was Northwestern Mutual Life Insurance Co., which acquired the property in early 2000 for about $24.5 million.

But the year’s first REIT acquisition isn’t exactly a signal that the transaction market will suddenly pick up, according to New York-based market research firm Real Capital Analytics. “In a period where there’s not a lot of good news, it’s a positive sign, but not a huge one,” says Robert White, president of Real Capital.

White notes that over the past two months, more large deals (of $30 million or more) have occurred, and that sales volume was up slightly in April, while the level of new offerings was down. “Taken altogether, it’s all positive on a relative basis, but on an absolute basis, the market is still stuck in the mud,” he adds.