Multifamily Investment Sales Surge

This year's first half sales compared to 15 properties sold through the second half of 2003. They consisted of a total 3,330 units and sold for an aggregate $139 million or about $48,345 per unit.

"Improving market fundamentals, state-leading job growth and the continued surge in population helped spur record sales activity in the Orlando MSA during the first half of 2004," says Robert W. Miller, senior vice president of CBRE's Central Florida Multi-Housing Group.

The first half production this year also outdistanced the comparable periods in 2002 and 2001. First-half sales in 2002 totaled four consisting of 846 apartment units that went for $41.8 million or about $49,456 per unit. In the same 2001 period, 20 sales consisting of 4,812 units closed at $288 million or $59,854 per unit.

Miller notes that total first-half sales this year are "close to the $624 million that sold in all of 2003." Based on the 2004 sales pace to date, the year could end with a record $1 billion in investment sales. Six of the 27 properties sold this year traded for more than $100,000 per unit. "Only four properties in Orlando had sold for more than $100,000 previously," Miller says.

South Orlando saw the most activity with eight properties changing hands. And "for the first time, condo converters began showing interest in Orlando," the broker says.

Of the 27 properties sold this year to date, 13 properties consisting of 4,534 units were built in the 1990s; 10 properties totaling 2,753 units were built from 1980 to 1989; and four assets consisting of 1,004 units were of pre-1980 construction.

Although they paid a higher price per unit this year compared to previous years, investors gained in the occupancy and rents category. Overall occupancy of the properties sold was 94%, up from 91.5% in the first half of 2003. Rents averaged $757 per month versus $749 per month in the comparable period last year.