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Unclogging the Distress Bottleneck

Investors looking for distressed multifamily opportunities have so far had slim pickings. But the flow of deals may grow stronger in the second half…

By Sule Aygoren Carranza - Editor of Real Estate Forum. | Updated on December 09, 2011

Investors looking for distressed multifamily opportunities have so far had slim pickings. But the flow of deals may grow stronger in the second half of 2010 and into 2011. Distress transactions have already started picking up for multifamily assets, sales of distressed properties accounted for 31 % of the nearly $1 billion of apartment assets that changed hands in April, according to the latest data from Real Capital Analytics. Troubled assets took up a 20% share of deal volume at year-end 2009.

By comparison, RCA reports that distressed assets accounted for 20% of the $700 million of retail deals that closed in April. Only six of the 30 hotel properties that sold in April were distressed, taking up $20 million of the aggregate $769 million in volume. And in the office sector, which saw $763 million in volume, just two of the 26 properties that traded qualified as distressed.

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