RCA in the commercial property press:

Apartment Know-How in NoHo?

The Wall Street Journal reports: Sales of apartment complexes nationwide have slowed to a trickle. But some investors have stayed behind as others have fled the sector and the sale of the Gallery at NoHo Commons gives a glimpse into their thinking.

NoHo Commons (in the North Hollywood section of Los Angeles) was purchased by a nontraded REIT managed by Behringer Harvard, a Dallas real-estate company. Behringer has become one of the biggest buyers of U.S. multifamily properties this year, buying five apartment complexes with 1,690 units for a total of about $274 million in cash and assumed debt. Behringer executives say they see opportunity in the downdraft.

Apartment buildings are clearly producing higher returns than they used to. In 2007, the so-called capitalization rates of apartment buildings, derived by dividing a building's net operating income by the price paid, were 5.8%. Today they have risen to 7.1%, according to Real Capital Analytics, the commercial real-estate research firm.

Articles related to this topic:

 REITs Are Poised to Pick Up the Pieces
 Commercial real estate crisis threatens recovery

Posted by: Matthew Stone

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