ARA Newmark presents the Second Quarter 2017 National Multihousing Market Overview

Executive Overview

• Sales Volume – Multihousing sales volume increased 25.2% to $33.7 billion in the second quarter, with secondary markets throughout the Southeast and Southwest continuing to attract the most capital.
• Cap Rates – Yields compressed 20 basis points year-over-year. Cap rate compression is primarily occurring in secondary and tertiary markets, whereas major metros remain unchanged.
• Rent Growth – Rental growth remains modest at 2.3% nationally, as heavy amounts of new supply are being delivered. Technology-driven employment hubs throughout the West Coast offer the strongest rental growth.
• Supply and Demand – Austin, Charlotte, Dallas and Nashville have experienced substantial inventory growth over the past 12 months. Furthermore, 2018 and 2019 are forecasted to have very strong demand.
• International Capital – With $8.5 billion invested in U.S. multihousing over the past 12 months, direct and indirect foreign capital continue to be increasingly active purchasing high-quality assets nationwide.
• Debt Markets – Debt capital for well-positioned assets remains plentiful despite a pull back in the CMBS market. Meanwhile, GSE’s, banks and life insurance companies have expanded their debt outstanding.