Jun 16, 2017 - 0 Comments - Multifamily Property -

RC Analytics Senior VP Jim Costello Delivers an Update on Multifamily Investment Property

Jim Costello with Real Capital Analytics joins Michael to discuss the multifamily investment market. Highlights include:

  • Deal volume into 2017 has given up ground, down 26% YTD through April
  • Deal volume down 20 mil from 2016 volume of 60 million
  • Prices, however, remain high
  • Believes this says that sellers are pulling back
  • Owners can’t find a reason to sell as can’t replace with a better investment
  • There appears to be a disconnect between what buyers will pay and what sellers will sell for
  • Garden apartment cap rates have continued to compress as high rise apartments have remained steady
  • With interest rates not expected to go lower, cap rates and likewise not expected to go lower, causing buyers to be less aggressive absent potential appreciation from cap rate compression
  • Investors, however, remain hungry for yield
  • Market seems to be on the “sell high” side of the “buy low sell high” maxim, but then what do you do with the money?
  • Doesn’t believe cap rates will return to their long term averages due to vast amount of money worldwide seeking yields