BIG PICTURE: Multifamily Is Everybody's Favorite Investment, Experts Tell GlobeSt.com

ORLANDO-Institutional and private buyers see a niche in multifamily today that isn’t as evident in other product. That is the opportunity to raise rents and sales prices quickly, regardless of the capitalization rate pegged in the initial purchase of the property.

“Buyers will pay 100 to 150 basis points lower because they know they can raise their rents” shortly after the transaction closes, Greg A. Moyer, senior vice president, Marcus & Millichap, Chicago, tells GlobeSt.com’s Midwest Bureau Chief Mark Ruda. “If you have a building with a cap of 8%, you would have 10 offers on it.”

The hottest multifamily submarket in Chicago is the North Side where supply isn’t keeping up with demand, Moyer says. Job growth has outstripped rental housing production for a decade. “We’re still adding jobs,” the broker tells Ruda, but “we have not kept up with new construction.”