Apartment transactions were up for the second quarter, with 1,584 properties changing hands, up 12% quarterly and annually. However, apartment sales volume was down 14% year-over-year to $35.1 billion and well below the $54.7 billion quarterly average over the past five years, according to a RealPage analysis. The average price per unit was about $214,000, compared with per-unit pricing averaging $151,000 from 2015 to 2019. The median cap rate was 5.41%, the lowest seen since the third quarter of 2023 but above the pandemic-era low of 4.67%.
“Apartment cap rates remain the lowest among major property types, keeping the asset class an attractive commercial real estate investment,” said the analysis.
On an annual basis, transactions for the year-ending second quarter totaled $154.1 billion on 6,445 properties traded.
Five apartment communities traded for $175 million or more during the second quarter, RealPage said. Three of those transactions were in the West, one was in the Northeast and one was in the South.
The largest transaction was the 349-unit Essex Skyline at MacArthur Place in Anaheim, which was sold to Miami-based Crescent Heights for $239.6 million in April. The per-door price was $686,500. The development opened as a condominium property in 2008 and was converted into apartments in 2010. It has been rebranded as Skyline OC.
The Folia apartment community in San Diego sold to a private investor in June for approximately $238 million. The sale price for the five-story, 342-unit community, which was completed in 2023, came to roughly $695,900 per unit. The community features a pool and spa, fitness center, pet spa, bocce ball court, putting green, outdoor grilling areas, fire pits, billiards, coworking space, kitchen entertainment and a playground.
The third-largest transaction of the quarter was the sale of the 1,008-unit Bella Vista at Hilltop apartment community in Oakland for $225 million, or $233,000 per door. The three-story community was built in 1988 and renovated in 2016 and includes some income-restricted units. Amenities include four resort-style swimming pools, a heated indoor pool with a Jacuzzi, sauna, business center, playground, lighted tennis courts and a fitness center.
Washington, D.C., was home to the fourth-largest apartment transaction for the quarter. WestEnd25 apartments traded in late June to JR Property Holdings for $186 million. The community was built in 2009 and sold for $657,000 per unit. The buyer plans to improve the 10-story high-rise apartment building’s common areas, including a new fitness center, redesigned rooftop amenity space, resort-style pool and sundeck and updates to unit interiors when a resident vacates.
Finally, the sale of Hill Estates in Boston ranked as the fifth-largest apartment transaction in the second quarter. In mid-June, the DiGiovanni Family sold the asset to The Hamilton Company, a Boston-based real estate firm, for $175 million or nearly $448,00 per unit. The property, which has been owned and managed by the DiGiovanni Family since they built it in 1965, includes a mix of townhomes and mid-rise buildings covering a 14-acre site. The Hamilton Company plans to make substantial investments to modernize and add amenities to the community.
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