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What Could Throw Apts. Off Course?

IRVINE, CA—Like all commercial real estate, the apartment market is vulnerable to a rise in interest rates. Cap rate spreads have fallen in the last few months to offset the gains in rates, but that cannot last forever, Ten-X’s Chris Muoio tells GlobeSt.com.

Chris Muoio Muoio: “While the apartment market remains healthy overall, it is becoming increasingly risky for investors.”

IRVINE, CA—Like all commercial real estate, the apartment market is vulnerable to a rise in interest rates. Cap rate spreads have fallen in the last few months to offset the gains in rates, but that cannot last forever, Ten-X’s senior quantitative strategist. Chris Muoio tells GlobeSt.com. As we previously reported, according to the firm’s March Commercial Real Estate Nowcast. the apartment sector posting a 1.2% gain in pricing during March—the strongest growth among any of the five CRE sectors.

We spoke with Muoio about the factors that make apartment investment so strong and whether or not the sector is iron-clad at this point.

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Carrie Rossenfeld

Carrie Rossenfeld

Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.

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