Apartment sales rose during the beginning of this year, ending the first quarter 31 percent higher year-over-year.
Garden property sales accounted for $7.1 billion while high rises rose $4.8 billion, according to commercial real estate research firm Real Capital Analytics. Each sector saw sales about 30 percent higher. About 13 percent of total sales involved distressed properties, up 9 percent from the previous quarter, although the total value was only $1.5 billion, the lowest in any quarter since 2009. Distressed sales were worth 25 percent of total apartment transactions last year, so the rise may not be a strong negative sign.
Primary, secondary and tertiary multifamily markets were all consistent in volume trends, according to the firm. Capitalization rates were more variable, as strong interest in a relatively small number of assets has caused compression in major markets and growth for tertiary markets. Secondaries exhibited little change.
Overall, RCA reported that cap rates fell slightly during the quarter, but were still largely recovered from the financial crisis. Growing stability in the sector may be a good sign for rental property management companies and other stakeholders.