Cleveland, OH, where the average unit price is $29,574, tops the study's multifamily buyer's list and has an average yield of 11.44%. Cincinnati ranks third, and the remaining seven among the top 10 buyer's markets are: Orlando, Jacksonville and Tampa, FL; Columbus, OH; Houston; Atlanta, and West Palm Beach, in that order.
By contrast, the San Francisco Bay area is the top multifamily seller's market with an average yield of 6.6% and $136,170 price per unit. Four additional California markets follow: Ventura, San Diego, Los Angeles, and Orange County. Seattle, Sacramento, Chicago, Baltimore and Denver, in that order, complete the top 10 multifamily seller's markets, according to the study.
"With huge disparities in yields across regions, many investors are selling properties in high-priced markets and exchanging into regions that have more upside and less downside risk," says David Frosh, Sperry's president.
By selling in New Jersey and buying in Philadelphia, just 50 miles away, Frosh says, an investor could increase returns by 31%. The study highlights many such examples. "By selling a Chicago multifamily property and buying apartments in Cincinnati, a mere 300 miles away, an investor could increase returns by approximately 25% and acquire twice as many units," he says.
The study is based on 3,997 transactions totaling more than $18 billion across 43 U.S. markets during 2002.
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