Several months ago Commercial Property News published a short article titled “Three Factors Keeping Multifamily Afloat”.  Josh Seidman noted a couple of interesting facts in the article that recently surfaced in a discussion one of our team had with an investment group in the Deep South last week. 

One of the points of interest in the article was that in the first two quarters of the year, multifamily sales nationally (per Real Capital Analytics) were strongest for multifamily units priced in the $10 to $30 million range, with sales in the range of $30 to $50 million and over $50 million noted to have declined precipitously compared to the same time period in 2007.  Some analysts feel that assets in this price range are better values than many of the more expensive commercial properties in other asset classes.  Emerging market multifamily investors focusing on B class properties find most of their potential acquisitions in or below the $10 to $30 million range. 

Fannie and Freddie, warts and all, have continued to support the multifamily market, albeit at a pace clearly below that of the several years prior. 

Probably the key factor supporting multifamily at this point in time, however, is the relative soundness of multifamily fundamentals in most markets, even considering the negative impact of the economy on occupancy here in the final quarter of 2008. 

That’s the key issue we were reviewing with the Deep South team – markets with sound fundamentals…..

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