BETHESDA, MD—There will be more net sellers in the multifamily sector this year compared to 2014, according to a recent industry survey conducted by Capital One Multifamily Finance. Grace Hubescher, president of Capital One Multifamily Finance, says this reflects strong demand for apartment product. “Owners can generate sales proceeds in this market that translate into strong returns,” Huebscher tells GlobeSt.com.

Twenty-nine percent of respondents to the survey expect to be net sellers, compared to just 18% who answered a similar survey a year ago. In addition, 47% of survey respondents plan to be net buyers in 2015. Taken together, Huebscher says, the net buyer/net seller numbers point to a more active year than in '14, a year which saw $112.4 billion worth of trades of multifamily properties worth $2.5 million or more, according to Real Capital Analytics.

Bearing out Huebscher's assessment, RCA figures for the start of this year show double-digit increases from a year ago. January's total for multifamily sales was $9.3 billion, up 42% year over year.

The majority of respondents to this year's survey once again ranked acquisition financing as their top priority in financing, with 52% of respondents saying this compared to 53% last year. Yet 19% of those surveyed identified refinancing as their most important financing priority. That's up significantly from the 12% who said this in '14, and reflects number of 10-year loans due to mature in 2015.

Although the prospect of rising interest rates topped the list of issues keeping industry professionals up at night, it caused insomnia for fewer survey respondents this year: 27% of those surveyed, compared to 34% in '14. Other critical issues were overheating multifamily values (23% of respondents), construction costs rising (22%) and overbuilding of apartment units (20%). Along similar lines, fewer professionals expect to need construction financing (21 percent vs. 29 percent last year).

This year, Capital One examined industry sentiment with a new survey question: what inning are we in for the current market cycle? “A solid, 63% majority said the market is in the sixth or seventh inning of the current cycle,” says Rick Lyon, head of commercial real estate banking at Capital One Bank. “The rise in net sellers suggests increased expectations for a change in market conditions.” Twelve percent of those surveyed believe that the current cycle has entered the final two innings, while only 7% think we're in the first three innings of the cycle.

In terms of property types, 46% of respondents said they expect urban properties to see the greatest increase in activity, while 29% expect suburban properties to be the most active. In addition, 36% of industry professionals surveyed said they foresee multifamily renovations and modernization of existing properties gaining the most momentum in '15. It ranked ahead of other industry trends such as developers moving into emerging markets (25%), accelerating growth of urban cores (16%) and increases in luxury developments (14%) and affordable housing (9%).

Capital One Multifamily Finance conducted the survey at a Capital One event during the National Multifamily Housing Council's annual conference for its commercial real estate banking clients and industry professionals. Percentages are based on 112 responses.