John Swartz, Los Angeles Apartment Investment Advisor’s Post

MULTIFAMILY MINUTE | EVOLVING LANDSCAPE Mid-Wilshire Apartment Market Q4 2023 v Q4 2022 The Mid-Wilshire apartment market has undergone notable changes in Q4 2023 compared to the corresponding period in 2022, illustrating a shift in both investment metrics and renter behavior. The median price per square foot (PSF) saw a significant decrease of 15%, while the median price per unit experienced an even steeper decline of 25%. Additionally, the median capitalization rate surged by 113 basis points (bps). These adjustments signal a considerable softening in property values within this vibrant Los Angeles neighborhood. Renter demand for the period slowed as the effective rent per unit decreased by 5% and the vacancy rate rose a substantial 203 bps. Despite these shifts, the transaction volume in the Mid-Wilshire apartment market only decreased by a modest 7%, totaling 14 transactions for the quarter. Investors see value in the area and are taking advantage of the current pricing adjustments. We expect to see a continued uptick in transaction volume as the market continues to stabilize coupled with the expected decrease in interest rates from the Federal Reserve later in the year. Are you considering a strategic exit from the market? Let the True North CRE Team be your trusted partner in this journey. Our full-service approach is tailored to empower you with clarity and confidence in every decision you make. Reach out to us for a complimentary valuation to get started. Presented by: True North CRE John Swartz, Los Angeles Apartment Investment Advisor Jacqueline Carroll, Multifamily Specialist #multifamily #losangeles #apartments #realestate

MULTIFAMILY MINUTE | NUANCED MARKET Westlake | MacArthur Park Apartment Market Q4 2023 vs Q4 2022 In the Westlake | MacArthur Park apartment market, the comparison between Q4 2023 and Q4 2022 unveils a nuanced landscape of investment performance and renter demand. Notably, the median price per square foot (PSF) experienced a substantial decrease of 24%, however, in an interesting contrast, the median price per unit remained unchanged. Additionally, the median capitalization rate saw a slight decrease of 4 basis points (bps). On the renter demand front, there were signs of stability with a modest increase in effective rent per unit of 1%, suggesting that there remains a steady demand for rental units. In addition, the vacancy rate increased marginally by 5 basis points. Transaction volume in the area saw a decline of 14%, totaling 6 transactions for the period. Looking forward, the Westlake | MacArthur Park apartment market is anticipated to see a continued stabilization in pricing as investors adjust to the prevailing higher interest rates and respond to emerging signs of economic stability. Furthermore, there is an optimistic outlook for an increase in transaction volume as the Federal Reserve is expected to lower interest rates in the forthcoming quarters. Are you considering a strategic exit from the market? Let the True North CRE Team be your trusted partner in this journey. Our full-service approach is tailored to empower you with clarity and confidence in every decision you make. Reach out to us for a complimentary valuation to get started. Presented by: True North CRE John Swartz, Los Angeles Apartment Investment Advisor Jacqueline Carroll, Multifamily Specialist #multifamily #realestate #losangeles #investments

MULTIFAMILY MINUTE | CONTRASTING TRENDS Santa Monica Apartment Market Q1 2024 vs Q1 2023 The Santa Monica apartment market demonstrated contrasting trends in the first quarter of 2024, with price adjustments reflective of broader economic conditions. Median price per square foot decreased by 9% vs the same period in 2023, and median price per unit saw an 11% reduction. Despite these declines, the median capitalization rate fell by 108 basis points. Renter demand showed resilience; effective rent per unit remained stable even as the vacancy rate rose by 61 basis points. Transaction volume in Q1 2024 mirrored that of Q1 2023, with six transactions recorded for the period, signaling a steady level of market activity despite varying economic signals. Investors seem to be adapting to the prevailing higher interest rates, bolstered by signs of economic stability. Furthermore, there is an anticipatory sentiment regarding the Federal Reserve's potential interest rate cuts starting in the third quarter of 2024. Such monetary policy adjustments are likely to boost market activity. As a result, an increase in transaction volume is anticipated in the upcoming quarters. Are you considering a strategic exit from the market? Let the True North CRE Team be your trusted partner in this journey. Our full-service approach is tailored to empower you with clarity and confidence in every decision you make. Reach out to us for a complimentary valuation to get started. We look forward to hearing from you! Presented by: John Swartz, Los Angeles Apartment Investment Advisor Jacqueline Carroll, Multifamily Specialist True North CRE #apartments #multifamily #realestate #market

Please see this well-described analysis of apartment supply and demand from SL Nusbaum. Given a large amount of product just now coming online that was financed in a lower interest rate environment, new supply should be slowing down considerably. Along with the greater availability of units including some returns to rental concessions in some areas, I believe we will be back to a supply deficit compared to demand shortly. #slnusbaum #apartment #multifamily #development #absorption #appraisal #commercialappraiser

Q2 apartment demand surged leading to near record high absorption. Does this sound familiar? Earlier this year we highlighted that “absorption levels in Q1 of 2024 nearly doubled that of historic Q1 trends” According to RealPage, Inc., nearly 400k apartment units were absorbed in the last 12 months. Despite current near record high demand, supply growth continues to outpace. It’s anticipated that nearly 630k apartment units will come online in the next 12 months. Despite the supply/demand gap tightening, it’s likely that supply side pressure will remain scrutinized. In speaking with local apartment leasing consultants, multifamily management firms seem to be reintroducing concessions to help stabilize occupancy. As reported by Yield PRO media, 80% of US renters believe now is not a good time to buy a home. Given the ongoing challenges of achieving homeownership, the affordability of renting compared to owning will help sustain strong demand. There continue to be signs of future supply contraction. GlobeSt.com reports that since the pandemic, multifamily construction permits are down 30% due to high interest rates, elevated construction costs, and increased product saturation. It’s to be seen how a slowdown in starts could impact rents. #cre #commercialrealestate #multifamilyrealestate #multifamilyinvesting #investmentsales #slnusbaum

As we journey through 2024, the multi-family property market in Southern California continues to showcase its resilience and strength. Despite various market shifts, multi-family sales and price per unit are still trading near or at record highs. This is a testament to the robust demand and the enduring appeal of multi-family properties in this region. Interestingly, more private equity firms and institutional companies are placing their bets on the multi-family market. A notable example is KKR, a leading global investment firm, which recently acquired a portfolio of 18 multifamily assets from Quarterra Multifamily for approximately $2.1 billion. Another example is DivcoWest, a San Francisco-based company, which purchased the 214-unit Reveal Playa Vista, located at 5710 East Crescent Park, for $122 million. The deal came out to about $570,000 per unit. These trends of companies acquiring apartment buildings are clear indications of the strong market sentiment and the high potential of multi-family properties, especially in Southern California. This is in anticipation of lower rates in the future, which would put pressure on cap rates and increase the valuation of the buildings, as well as continuing the trend of rent increases. However, it’s important to note that the market is dynamic and constantly evolving. We continue to monitor the trends and adapt to these changing market conditions. #MultiFamilyProperties #RealEstateTrends #SouthernCalifornia https://lnkd.in/grDa3C5r

The Multifamily NW Fall Apartment Report Luncheon gave us a valuable glimpse into where the Portland apartment market is headed. As we head into the end of 2024, the trends are becoming more apparent. At Princeton Property Management, we use these insights to help property owners plan for what’s next. Here are some key takeaways shaping our strategies: Market Recovery on the Horizon: Property values are showing signs of gradual stabilization. Research indicates they’ll bottom out in early 2025 and could reach 2022 levels again by 2027 With recent Federal Reserve rate cuts, investor sentiment has improved, suggesting the market may pick up momentum next year as market activity grows. Vacancy Trends: Vacancy rates have declined to 4.5% overall, with further declines projected in the years ahead. Stabilized properties are performing even better, showing resilience amid a shifting market. Rent Growth Returns: After a slight dip in 2023, rents are up 1.5% in 2024, with growth expected between 2.5% and 6.0% over the next five years. As property owners prepare for 2025, staying ahead of these trends is critical. At Princeton Property Management, we’re helping our clients plan proactively with expert guidance grounded in the latest market insights. Looking for a partner who’s always a step ahead? Let's connect! #PrincetonPropertyManagement #PropertyManagement #PortlandRealEstate #MarketTrends

📈 Apartment REITs Forecast Positive Outlook for 2025 as Supply Glut Eases 📈 With a record supply of new apartments set to taper off, some of the largest apartment REITs are optimistic about 2025. Here’s what they’re seeing in the market: 🏗 Decline in Oversupply: Leaders like Mid-America Apartment Communities (MAA) and Equity Residential expect supply pressures to ease by Q2 2025, boosting rental demand and pricing stability. 💼 Major Investments: REITs are increasing acquisitions and development, with Equity Residential spending $1.26B on 14 properties in high-supply markets like Denver, Dallas, and Atlanta. 🌞 Focus on Sun Belt: MAA maintains a $1B development pipeline in the Sun Belt, citing demand from strong job growth and tech sector expansion. 📊 Demand Drivers: High homeownership costs, coupled with thriving job markets and tech hubs in the South, are driving rental demand. 🏙 Regional Variations: While Sun Belt markets are expected to recover by mid-2025, areas with greater supply pressures like Austin may not see rent growth until 2026. This outlook signals an anticipated recovery cycle in multifamily demand and leasing conditions beginning next spring. #Colliers #Pittsburgh #MoreIn24 #ThriveIn25 #ClosersCoffee #ColliersCapitalMarkets https://lnkd.in/eYdb-pJj

In a recent news report from Multifamily Executive Magazine, they noted that Austin, Memphis, and St. Louis recorded the largest yearly rent drops. Remarkably, rents have been on a continuous decline for the past eight months. The part that stands out to me is the resilient rental market, which despite the drop, the median rent of $1,722 is only $36 less than the peak seen in August 2022. This is unusual because despite the declining trend, the rental prices remain relatively stable, possibly indicating a steady demand in the rental market. This is significant because it illustrates the continuous demand for rental housing, especially in the absence of new housing construction in major markets. The resilience of the multi-family housing industry will probably keep it a great investment for the foreseeable future. What are your thoughts on this trend and how it might affect the housing industry in the future? #RealEstate #RentalMarket #HousingTrends #multifamily Apartment Management Consultants LLC, Avenue5 Residential, Cardinal Management Group, Inc., Fairfield Residential, Hawthorne Residential Partners

The Dallas' multifamily market is on the brink of a turnaround! While recent challenges included high vacancy rates and a slowdown in investment, key factors are now aligning for a strong rebound. Texas' booming business scene has attracted hundreds of companies in the past decade. This, coupled with an influx of new residents post-COVID, has fueled a surge in housing demand, especially in the Dallas-Fort Worth metroplex. Read more about why Dallas is a prime market for multifamily success below ⬇️   https://lnkd.in/evwfHZpR