Dive Brief:
- Apartment sales volume fell 28% year over year to $10.2 billion in October, according to a report that data firm MSCI Real Assets shared with Multifamily Dive.
- Individual asset sales dropped 22% YOY. However, they totaled $131.4 billion over the 12 months ending in October, showing a return to pre-COVID-19 normalcy. From 2015 to 2019, individual asset trades averaged $126.4 billion per year.
- Portfolio activity fell 54% YOY to $1.3 billion, pulling down overall sales. Overall, mid- and high-rise trades fell 32% YOY to $4 billion in October. Garden property transactions dropped 25% YOY to $6.3 billion.
Dive Insight:
Apartment values ticked up, as the Real Capital Analytics commercial property price indexes for multifamily increased 0.5% YOY, according to MSCI. They rose at an annualized rate of 3.6% from September. Cap rates have fallen 10 basis points over the last year, to an average of 5.5% in October.
“From a pricing standpoint, cap rates have really stabilized over the last few quarters, with cap rates for Class A assets in our markets in the 4.5% to 5% range,” Camden Property Trust CEO Ric Campo said on the REIT’s third-quarter earnings call. “And then the Class B phase and in the 5% to 5.5% range.”
Overall, the 2025 transaction market has had its ups and downs compared to 2024. In Q3, sales volume increased before falling in October. Ultimately, transaction volume should be similar over the two years, according to Campo.
“With respect to volumes, 2025 is trending about the same as 2024 to sell well below pre-COVID levels, which is to some extent being driven by lenders continuing to modify and extend loans,” Campo said.
With those modifications, there’s no meaningful market distress to drive sales. However, Matt Ruesch, co-founder of Washington, D.C.-based investment firm Broad Creek Capital, said the market is starting to reset.
“People are ready to get out there and transact,” Ruesch said. “So we're really excited about the next 12 to 18 months.”
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