U.S. demand for multi-family properties swells

TRD New York /
Mar.March 07, 2012 11:00 AM

Demand for multi-family properties nationwide is surging, due to a lack of inventory in the pipeline in combination with the lowest homeownership rates in more than a decade, Bloomberg News reported.

Investors’ desire for multi-family properties has allowed lenders to recover an average of 75 percent of the value of defaulted mortgages tied to multifamily housing — the highest recovery rate among all commercial property types, Bloomberg said. Some buyers are even paying full price for distressed properties, forgoing the foreclosure procedure entirely, in an effort to snap up the assets before other buyers.

“Multifamily was not hit hard from a capitalization standpoint,” said Ryan Millsap, managing principal at Los Angeles-based Arenda Capital Management, which recently bought a distressed building before it was foreclosed on. “Everybody overpaid — but there was nothing wrong with the actual properties, and today’s market recognizes that. The property itself doesn’t know the difference — it just keeps operating.”

Sales of U.S. apartment properties totaled $3.8 billion in January of 2012, a 53 percent increase year-over-year, according to data from Real Capital Analytics. [Bloomberg]

Related Articles

Cammeby's International Group founder Rubin Schron and, from top: 194-05 67th Avenue, 189-15 73rd Avenue and 64-05 186th Lane (Credit: Google Maps)

Ruby Schron lands $500M refi for sprawling Queens apartment portfolio

Wendy Silverstein, co-head of WeWork’s real-estate fund, is out

WeWork’s side businesses are fizzling

CoStar reaches $11M settlement in copyright infringement suit against Xceligent

620 Sixth Avenue and RXR Realty's Scott Rechler (Credit: Getty Images, RXR Realty)

RXR gets $400M+ from Goldman Sachs to refi Sixth Avenue building

A New York court’s greenlight of a class action against Big City Realty could change the dynamic of class action suits. (Credit: iStock)

“Nightmare” for landlords: Court OK’s class action against Harlem owner

WeWork founder scrambled for $100M loan before $1.7B bailout

The Daily Digest - Tuesday

WeWork’s cash flow troubles, selling NYCHA’s air rights and more: Daily digest