Apartment Sales Pace, Cap Rates Dip

NEW YORK CITY-Sales activity for commercial real estate registered its third consecutive monthly increase in February, and March volume was on pace to repeat that trend. However, in the apartment sector, deal activity slightly slowed. Some $3.8 billion of significant properties changed hands in February, but just $1 billion of those were multifamily assets, according to Real Capital Analytics. That may be a 14% increase over year-ago levels, but the number of properties that flipped fell to a historic low.

The “mixed message in sales volume,” says the firm, “is noteworthy given more consistent improvements in the broader market recently.” For all properties, year-over-year sales volume rose 26% to $3.8 billion in February. And already in the first few days of March, $3.4 billion worth of deals closed and more than $11 billion was under contract. Another $10.5 billion of new properties were put on the market for sale in February, marking the highest level since last spring.

But for apartments, says RCA, there is a further positive spin: whereas last year not one multifamily property traded for more than $50 million, February saw 12 assets close in deals worth more than $50 million.