The practice of purchasing an underperforming multifamily asset at a discount, implementing significant renovations and raising rental prices, has grown in popularity over the last several years. But like much else in the multifamily industry, value-add investment suddenly became the subject of uncertainty when COVID-19 took hold in early 2020.
Value-add apartment sales totaled $32 billion in transaction volume in 2018—16 percent of all multifamily deals—according to Real Capital Analytics. But the unpredictability of the pandemic caused many investors to pull back or put deals on pause, and to reexamine their business strategies. The second quarter represented the lowest multifamily investment sales for any quarter in almost a decade.
Read more...Where Value-Add Investing Stands via Multi-Housing News