One of the hottest trends in commercial real estate is multi family properties. In this month’s Market Trends Roundup, we’ve sorted through the noise and have selected four articles that will bring you completely up to date in everything multi-family.
A boom in building multi-family units coupled with higher vacancy rates has caused a slowing of growth in rents. Where a few short years ago landlords were enjoying lucrative growth in rents, now they are looking at lower single digit growth.
“Although a significant trend shift, apartment vacancies are still expected to remain near 10-year lows across most of the nation, even with the addition of hundreds of thousands of new units.” – Costar
Apartment Construction Boom Slowing Rent Increases as Market Shifts Into Expansion Phase
In today’s commercial real estate market, some kinds of properties are doing much better than others. The good news that multi-family properties are among the winners, but if you’re holding suburban office space, you might not be as happy.
“Moody’s/RCA’s index values apartment buildings in major markets at 34.6% higher than the previous peak hit in Dec. 2007. Office buildings in major central business districts are up 27.9%…by contrast, values of suburban office buildings and retail properties in non-major markets both remain down 23% from their 2007 highs. And values of hotels in non-major markets are down 30.8%.” – WSJ
Commercial Real Estate Is Now a Market of the Haves and Have Nots
There’s nothing quite like being in multi-family real estate these days. Still running as hot as ever, the specter of rising interest rates and a huge building boom isn’t even dampening the enthusiasm of buyers across the country.
“If you talk to any multifamily specialist across the country, particularly in the Sunbelt and on the coasts as well as in Chicago, the demand is through the roof…” – CCIM
One of the fundamentals of investing is knowing how to measure the performance of each component of your portfolio. In multi-family real estate, determining whether you have a winner or not can take some work.
“Buying a deal for a $1 and selling it for $2 requires knowing when the dollar was invested and the hold time to determine yield.” – Multifamily Insight
How to Measure a Winning Purchase
Multi family investments are complex. Come to the experts at Pacwest; we’ll put our expertise and experience to work for you. From a team that will take care of every detail of every transaction, to a friendly hello at the grocery store, we’re the right investment brokerage for you. Call 541.912.6583 today to get started.
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