D.C. multifamily sector draws investors

Projections of limited supply and continued rent growth are making the Washington, D.C., apartment investment market one of the nation's strongest, The Washington Post reports.

Local investors, national real estate investment trusts and other sources of capital are interested in the area, the source reports, and declining cap rates have helped push per-unit sales prices up to levels seen in 2007.

Last year saw 15 multifamily land sales in the metro area, according to the source, for a total cost of $257.1 million. The land may support as many as 4,900 new units, making both sales volume and potential units higher than the $181 million and 4,100 units from 2010.

The strength of the market is partly due the weaker status of investment alternatives, the source notes. Regardless of the cause, however, the apartment market is performing well, particularly Class B investments.

Rental property management firms may find new business as construction proceeds in the area. For the time being, the market is expected to be fairly stable, according to the source, so current business should proceed smoothly.