PHOENIX—A return of the traditional investor may have helped keep the multifamily market active in 2013, especially in the apartment sector. Also helping, distressed properties that flooded the market from 2008-2011 have diminished substantially.
GlobeSt.com spoke with Jim Crews, multifamily expert of Cushman & Wakefield of Arizona to get his take on the change in the market—apartment buildings in particular. Cushman & Wakefield of Arizona’s multifamily group ended 2013 on a high note, closing 3 deals worth $26.5 million.
“If you go back to ’08 and ’09 you have more kind of distressed assets and even lender-owned properties, people were making their investment decisions based on whether it’s a good buy based on price per unit or price per square foot,” says Crews.
“And three years ago your buyer pool wasn’t as big and guys were just buying deals knowing they could sell them in three or four years at a higher number,” Crews told GlobeSt.com.
Moving forward Crews sees the buyer pool seeking out those cash flow returns, with a caveat: “As interest rates move up or down that does affect those returns. The other thing is that is probably going to affect the multifamily investment community is that other segments are becoming more attractive—office, retail, hotel, all as they rebound.”
Crews says there may be some capital flow out of and into those markets, but that returns have been good on a year-to-year basis over the past ten years.
“Multifamily, apartments in particular, are going to be a part of a lot of people’s real estate portfolios in the coming year.” says Crews.