The multifamily and commercial real estate markets may be ready for refinancing activity in California, based on current and pending transactions.
Data from real estate firm Marcus & Millichap suggests that low vacancies in Northern California markets are contributing to rent growth as high as 6 percent for standard properties, with class-A units outperforming their 2007 rent levels, GlobeSt.com reports.
"The market is extremely tight and cap rates are very aggressive for both stabilized assets and for value-add properties," a Marcus and Millichap spokesperson told the news source. "Owners with loans coming due in the next two years or less are looking to refi now and are realizing that if rates move up more than 30 or 40 bps, it is well worth paying the prepay penalty to refi now."
The rent levels indicated should benefit rental property management firms in the area, allowing them to improve the profitability of units they operate. Owners and investors, at the same time, may find it a good time to pursue refinancing activity and lock in rates before market conditions change.