Home > multifamily, Uncategorized > Top 10 Markets for Multifamily Deals

Top 10 Markets for Multifamily Deals

Philadelphia Real Estate Rittenhouse Square1 176x300 Top 10 U.S. Markets for Multifamily Deals

Even though multifamily has been the best-performing asset class since the recession hit, the multifamily sector has been hotter in some markets more than others. From Integra Realty Resources’ Viewpoint 2013, here is a ranking of the Top 10 Markets for Multifamily Deals!

(Rankings are based on volume of reported transactions in 2012)

10. Seattle

9. Austin

8. Houston

7. Phoenix

6. Denver

5. Atlanta

4. Dallas

3. Los Angeles

2. DC Metro

1. Manhattan

This ranking is based on data collected by Real Capital Analytics at the end of last year.

Nationally, the average cap rate in an urban multifamily deal was a respectable 5.91%, but the western region outperformed this average with an impressive (5.04%), according to IRR. The Northeast shows a 5.77% average for urban multifamily, even though it is the most densely populated U.S. region.

Among America’s most active multifamily markets, the average price per unit has remained fairly consistent over the past few years. The average cost per unit in Manhattan, for instance, has remained relatively constant (and exorbitant) in spite of the recession.

Many of the country’s most valuable multifamily markets didn’t report enough transactions to make this Top 10 list. The best examples all begin with “San”: San Diego, San Jose, and of course, San Francisco. Among such West Coast cities, the average sale price per unit is disproportionately high when compared to the city’s transaction volume.

Clearly, those lucky enough to hold multifamily assets in these key California markets have no compelling reason to sell–yet. It seems reasonable to assume that apartment investors, whether small firms or large REITs like AvalonBay (NYSE: AVB), will continue to sit on their investments in these areas, and enjoy the steady income, until the growth of these markets finally slows.

Once that happens, the Top 10 cities for multifamily transactions will become a very different list.

llenrock.com, Eric Hawthorne

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Categories: multifamily, Uncategorized
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