"In a way, we don't realize how lucky we are in the multifamily sector," said Robert Falese, a senior vice president at CapMark Finance, who said that of the $1 billion in transactions his Horsham-based firm oversaw last year, 98% were multifamily, up from 50% of a $2-billion volume the previous year.
In a condo market where prices are marked down between 5% and 12% and "nobody's buying unless they have get a steal on it" more apartments will come to market, said David Grasso, president and chief executive officer of locally based Grasso Holdings.
"There are a few deals that that will turn into big blocks of rental apartments," he said. "We will have a softer landing [than other markets], but there will be broken condo projects in Philadelphia."
There is currently rent growth right now in the suburbs, said Bradley Korman, co-president of Trevose-based Korman Communities, but he conceded that occupancy dropped 3% last year. One problem landlords are facing is the need to invest in their properties but a lack of willingness to spend by institutional partners.
"But you still have to do work," Korman said. "You still have to take care of your properties."
Grasso said that firms are concentrating now on fundamentals because potential transactions don't seem that attractive in this market. "If the deal doesn't have the moniker of "distressed" on it, people don't want to do it," he said.
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