The apartment sector findings differ somewhat from the trends for all property types discussed in the overview in two respects: lenders have shown a greater propensity to sell REO apartment properties and the public REITs have yet to re-emerge as net buyers. In addition, no investor group has significantly bulked up their apartment holdings. Excluding lenders, cross-border investors have registered the largest net increase, but at less than $500 million, the amount is relatively small.

The return of assets to lenders and the sale of REO properties is in far greater balance in the apartment sector than for other property types. Lenders have taken back $2.0 billion of apartment properties to date and have disposed of $1.3 billion of apartment REO. Apartment properties, including bulk condos, have accounted for half of all REO properties sold in 2010.

Public REITs' acquisitions and dispositions of apartments have been equal to date in 2010 resulting in no net change to their portfolio holdings. Equity Residential has been by far the most active buyer, but many others have announced plans for significant acquisition activity this year that has only recently started to materialize.

Private and institutional buyers have made the largest dollar volume of acquisitions this year, but both have also seen the greatest declines in their portfolios. Institutions have been net sellers but the same can not be said of the private sector. Nearly $2.5 billion of the total $5.5 billion in divestments from the private sector were either transfers back to the lender or lender-forced sales to third parties. Excluding these involuntary transfers, the private sector has been a net buyer of apartments again. This may be a significant shift in a longstanding trend.

Data subject to future revision; based on properties & portfolios $5 mil and greater.
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