LOS ANGELES-The multifamily sector hascontinued to perform in 2013, albeit with increased competition inthe marketplace—especially for quality acquisitions. With a strongfew years of rent growth and price appreciation, the sector hasoutperformed most other property types in the recovery. Thus, moreand more players have sought to capitalize on the multi-familyopportunities. Many acquisitions have thus been poached. Even so,the year is closing strong with choice assets still available tosavvy investors with strong business plans and the capital to backthem and act quickly.

Investors in 2013 participated in a heated apartmentsmarketplace. Acquisitions activity topped out at its highest volumesince the bust of 2008, with properties trading hands at everhigher prices. Activity continued to follow rental demand, and therent rate increases resulting from it. Development of new productcontinued to flow into the market and 2014 will continue to seeadditional product coming to market.

With 2013 closing out strong, the horizon for the multifamilysector in 2014 shows promise. According to REIS, landlords willlikely drive asking rents upward approximately 3.1% with pricesoutpacing inflation, which industry forecasts predict to remainmuted at 2%-2.5% nationally. Effective rents will also climb at asimilar pace, at a forecasted 3.2%. The bid-ask for investmentproduct will continue to narrow as the supply of strong acquisitioncandidates thins.

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