IRVINE, CA-For GlobeSt.com Thought Leader Auction.com, multifamily is still an important sector, as made apparent by its recent three-day event that resulted in $125 million in transactions. However, Eric Paulsen, the firm's president, says apartments are on the the third-most popular product type it is selling so far this year, behind retail (See them at RECon in Last Vegas next week at booth C168F.) and office. He tells us why he thinks this is and overall trends he is seeing the commercial real estate auction arena.
GlobeSt.com: Is multifamily the hottest sector for auctions right now?
Eric Paulsen: Believe it or not, in 2012 we sold more apartments than any other product type, but so far in 2013, it is a different story. Apartments are actually third, coming in behind retail and office. Whether that's because our clients are more weighted in other product types or because they are just now getting around to selling their other product, multifamily has been replaced as the largest volume asset class so far this year with us. I anticipate by year end that multifamily will be back up in the ranks, though, as yes, it is still a very desirable asset class and one that we achieve very good pricing on.
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GlobeSt.com: Is there too much demand and has everything been bought up?
Paulsen: The ranking above is not a reflection of the apartment market. Year to date (March), we have traded $100 million of retail product, office of $75 million and then multifamily of $40 million. While that is a big differential, I don't think it indicates a trend other than our sellers were more willing to part with their office and retail than they were multifamily. It's a reflection that the sellers had more office and retail in their portfolios that were ready to be transacted earlier this year.
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