Multifamily buyers set record with $53B spending spree

Rising rents lead to all-time high in Q2 dollar volume

Blackstone CEO Stephen Schwarzman and Morgan Properties CEO Mitchell Morgan (Getty, Morgan Properties, iStock)
Blackstone CEO Stephen Schwarzman and Morgan Properties CEO Mitchell Morgan (Getty, Morgan Properties, iStock)

Apartments are where the heart is for investors, who set a second quarter record with a three-month spending spree.

Investors purchased $53 billion of multifamily real estate from April through June, according to Real Capital Analytics data. The buying binge marks a big turnaround from last year, when investors spent less than $20 billion during the same quarter in the early days of the pandemic, according to Bloomberg News.

Apartment buildings are seen as a safer investment option than office buildings and malls, which have struggled through the pandemic. The sector is also buoyed by the hot housing market, which has squeezed some renters out of purchasing a home.

As a result, rents are rising quickly. In July, effective asking rents soared 8.3 percent from July of last year, the biggest year-over-year increase in over a decade.

The companies capitalizing most on multifamily real estate are Blackstone and Morgan Properties. In the 12 months ending June 30, the two companies made the most acquisitions of apartment buildings.

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In February, Morgan and Olayan America plunked down $1.75 billion for a portfolio of 48 multifamily properties. It marked Morgan’s largest acquisition in two years.

In May, Blackstone agreed to buy almost 5,800 apartments in San Diego for more than $1 billion. The private equity and investment film plans to spend $100 million in improvements for the properties.

[Bloomberg News] — Holden Walter-Warner