Rising interest rates may prompt apartment buyers to modify expectations and strategies, but these factors haven’t diminished their desire for multifamily properties — at least not yet. The voracious demand that has fueled transaction activity and capitalization rate compression across the multifamily sector in recent years appears steadfast in many markets. “We are seeing sales volume that is equal to or slightly greater than the same time last year,” says John W. Stone, CCIM, principal, managing director of Multifamily Services/Foreign Investments at Colliers Arnold in Clearwater, Fla. “There is no shortage of bidders. There is no shortage of cash. There is no shortage of want.”
National apartment sales activity surged during the first half of the year with $49.4 billion in properties trading hands — a 55 percent increase compared to the same period a year ago, according to Real Capital Analytics. However, sales volume spiked during the first quarter due to a large Archstone portfolio sale. Extract that sale from the mix, and apartment sales rose a more modest 9 percent, according to RCA.
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