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Multifamily acquisition yields and price per unit have hovered at record lows for several years despite Treasury yields moving up and down by more than 150 basis points during that time. What does that mean for pricing? Yardi Matrix spells it out in its newest report on the asset class: it means investors are willing to pay up even as market conditions change. The average price per unit in 2019 was $155,000, up 8.8% from 2018, it notes.
One troubling exception to this pricing trend is New York City, where multifamily property values were hit hard by the new rent control law that limits rent growth, the ability to bring vacant units up to market rates and the ability to raise rents in conjunction with property repairs, the report notes. "Transaction activity for rent-stabilized apartments fell off in the second half as owners tried to determine how much values have fallen, with estimates ranging between 25% and 50%," it said.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
