Can multifamily investment sales continue record-setting ways?

Can multifamily investment sales continue record-setting ways?

Multifamily investment sales

Multifamily investment sales set records in 2015.

January 2016

After a record-setting 2015 for multifamily investment sales, there is some uncertainty regarding the market’s future performance.

A fourth-quarter surge resulted in investors pouring a record $150.6 billion into apartment properties in 2015. That figure was up 16 percent from 2014, according to data from CoStar. The $47.3 billion in apartment sales for the fourth-quarter of 2015 also broke a record, crushing a $38.4-billion quarter from 2014.

But despite the giant leap forward from 2014-15, early projections for multifamily investment sales in 2016 are strong, yet modest. That may be due to a variety of factors, including:

  • The high price of multifamily properties in many markets
  • A slowdown in the leasing of new properties
  • The downturn of apartment rents late in 2015

Hopes for a robust 2016 can be pinned to an influx of foreign buyers, according to research from JLL. That same research suggested a growth pace of between 5 and 10 percent for multifamily investment sales in the year ahead.

In an interview with CoStar, JLL international director David Williams said, “While institutional investors made up the majority of buyers in 2015, we expect foreign dollars to be the wild card in the year ahead.” The apartment sector should see more cross-border investment in 2016, giving multifamily sales a boost.

Maybe the record books are safe, but there’s still reason to believe multifamily investment sales will be strong in the year ahead.