Multi-family investment remained subdued in the new year. According to data from Yardi Matrix, in the first two months of 2021, nationwide trading volume reached $ 16.9 billion. Although a far cry from the $ 38.6 billion in deals closed in the fourth quarter of last year, investors continue to seek deals even amid continued economic uncertainty.
In the western Yardi Matrix region, this trend is evident. In January and February, the region recorded nearly $ 2.7 billion in multi-family transactions, up from $ 6.6 billion in the previous quarter. Sales volume was relatively evenly distributed across asset classes, with communities targeting lifestyle tenants achieving $ 1.5 billion in transactions, or 56.1% of volume this year. Using data from Yardi Matrix, the table below highlights the top five markets for multi-family transactions in the Western region.
|Rank||Market||Units||Transaction volume (in millions of dollars)||Price per unit|
|1||Phoenix||6,433||$ 1,436.07||$ 223,235|
|2||Denver||1,861||$ 517.10||$ 277,859|
|3||Tucson, Arizona.||1,045||$ 131.95||$ 126,268|
|4||Las Vegas||636||$ 77.65||$ 122,091|
|5||Albuquerque, New Mexico||855||$ 53.85||$ 62,986|
5. Albuquerque, New Mexico
Almost $ 54 million in multi-family properties traded in Albuquerque, New Mexico in the first two months of 2021, well above the $ 15.1 million in deals closed in January and February of the previous year . Albuquerque has performed well over the past year, with rent growth of 6.1% year-over-year through February, higher than most US markets.
This year, the market’s four deals were for 855 units, and the overwhelming majority of apartments – 92% – were classified as affordable. PacifiCap Properties was the seller in three of the four transactions, covering 735 units. The buyer, Laguna Point Properties, financed the fully affordable acquisitions with three Freddie Mac loans from NorthMarq Capital totaling $ 36.6 million.
4. Las Vegas
Four multi-family deals totaling $ 77.7 million were completed in Las Vegas in January and February, an average of just north of $ 122,000 per unit. While this marked a steep decline from the same time last year when $ 405 million in sales closed, it’s hardly surprising severe and lasting impacts the pandemic has had over the subway game industry. Even with the larger scale economic challenges facing the metro, rental growth has been strong, reaching 5.1% year over year through February.
Next Wave Investors’ $ 28.5 million acquisition in February of Spanish Oaks Apartments in South Las Vegas was the largest deal in the market. Bridge Investment Group financed the purchase with a loan of $ 24.3 million. Seller Shulgin Acquisition Group owned the property built in 1976 for nearly five years, buying it in mid-2016 from ConAm for $ 14.7 million.
3. Tucson, Arizona.
Boasting 7.3% year-over-year rental growth through February, the Tucson, Ariz. Multi-family market remained strong. Although the metro ranks third on our list, with $ 132 million in deals closed in the first two months of 2021, that number is down noticeably from the same period in 2020, when deal volume increased. crossed $ 450 million.
One of the the largest multi-family homeowners in the market, Bridge Investment Group acquired two assets in January totaling 626 units. In the larger of the two deals, the Salt Lake City-based investor paid Greenwater Investments $ 34.8 million for the 360 units of Catalina Ridge at 7400 E. Golf Links Road. KeyBank provided $ 26 million in Freddie Mac acquisition financing for the purchase.
After a difficult 2020 with rent growth largely capped, Denver’s multi-family market appears to be on the road to recovery. The metro’s diverse economy and rapid population growth will keep it on solid footing until 2021, as the broader national recovery begins to take hold. Multi-family transactions topped half a billion dollars in January and February. This is a major downgrade from the $ 1.2 billion traded during the same window in 2020, although the speed of transactions is likely to accelerate as investor confidence strengthens throughout. of the year.
The metro’s largest deal in February was Praedium Group’s $ 101.6 million purchase of Gateway Arvada Ridge in the northwestern suburb of Arvada, Colorado. New York Life funded the purchase of 296 units with $ 61 million in acquisition financing. The seller, Embrey Partners, had delivered the community a year earlier, in February 2020, after just over two years of construction.
First metro on our list, Phoenix recorded over $ 1.4 billion in multi-family transactions in the first two months of the year, a 66% increase from the $ 864 million traded in the same period. Last year. The market also stood out nationally in other respects, with annual rental growth reaching 6% through February, supported by strong demographic growth and corporate migrations.
Phoenix’s largest multi-family transaction through February was Millburn & Co.’s $ 178.5 million acquisition of 832 Heritage units in Deer Valley from Priderock Capital Partners. Located at 3010 W. Yorkshire Drive, some 15 miles north of central Phoenix, the property was completed in stages in 1997 and 2001. The community last changed hands in late 2017 for 125.5 millions of dollars. highest price ever paid for a single multi-family asset on the market.
Yardi Matrix covers all multi-family properties over 50 units in 133 markets in the United States. This ranking reflects the transactions for the properties in that sample group.