Demand for multi-family nationwide rescues holders of defaulted mortgages

Mar.March 07, 2012 02:15 PM

Demand for multi-family properties nationwide is surging, due to a lack of inventory in the pipeline in combination with the lowest homeownership rate 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

Rendering of the project

Time Equities plans apartments, retail on former office site in West Palm

Shorecrest Club Apartments

CBRE fund pays $132M for Shorecrest Club Apartments in Miami

Arnaud Karsenti, Michael Adler and the Link at Douglas

Douglas Station project scores $99M loan for second tower

Rendering of Soleste Twenty2 and Robert Suris

Estate Companies completes 338-unit West Miami project

A rendering of Society Las Olas (Credit: Facebook)

16K apartments to be delivered in South Florida this year: report

Brian Gordon and Gio Midtown

Magellan launches leasing of Midtown Miami apartment tower

Masoud Shojaee and 3650 Bird Road (Credit: Google Maps)

Shoma plans two-tower rental project near Coral Gables

Bella Apartments at 225 179th Drive (Credit: Google Maps)

Investor buys Sunny Isles apartments