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ATLANTA-Locally based Apartment Realty Advisors has seen more than $4 billion in multifamily transactions in the first half of 2006, according to a report issued by the company.

Since the first of the year, ARA has handled 174 transactions for a total of 46,347 units across the country. This reflects a 5.8% growth rate over the first half of 2005. Derrick Bloom, president of ARA and principal of ARA’s Atlanta office, tells GlobeSt.com that, although sales have been strong this year, the activity is more characteristic of the market than in the past few years when many apartment complexes were sold to developers as part of condo conversion projects.

“We had so many condo conversions over the past two years,” he says. “Now we’re seeing more normalized activity with apartment investors selling to other investors. It’s still a very healthy market, but now it’s steadier and more stable.”

For example, in Boca Raton, the market has cooled since last year when the condo conversions resulted in strong sales. Despite the slowdown, the Boca Raton office reported mid-year sales volume of $1.1 billion. “Atlanta is still very good,” Bloom says. “We had a record year and we’re going to well this year too.”

However, some investors are moving away from coastal areas, in part because insurance rates have increased. By contrast, the Midwest has also seen an increase in investment activity. The investment sales volume for the first half of 2006 in the company’s Dayton office outpaced the entire year’s volume in 2005 by 64%. “Strong job growth in major metropolitan markets such as Indianapolis combined with virtually no new deliveries of product is forcing a burn-off of concessions and as a result we’re finally seeing rental rate growth,” says Debbie Corson, ARA Ohio principal. “The Midwest markets are starting to recapture outside capital as buyers are looking geographically inward and moving away from coastal markets where surging insurance costs are pushing buyers out of the market.”

One area that has seen a decline in activity is Houston, where the market was impacted in 2005 by a temporary influx of residents who fled the New Orleans area after Hurricane Katrina. Many of those residents are now moving back. “We had a bump in activity in Houston in 2005,” Bloom says.

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