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3Q17 United States Multihousing Market Overview

3Q17 ARA Newmark United States Multihousing Market Overview

NOVEMBER 2017
 
ARA Newmark and Berkeley Point Capital present the Third Quarter 2017 United States Multihousing Market Overview. The statistics and outlook contained in the report illustrate current trends in the Multihousing sector.

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Executive Overview

Sales Volume Sales volume for the past 12 months totaled $148.5 billion with quarterly volume reaching $39.3 billion, representing an 11.1% quarter-over-quarter increase and 4.0% year-over-year growth. Investors continue to pour capital into top-tier secondary markets such as Atlanta, Dallas and Denver.
Cap Rates Cap rates remain flat year-over-year at 5.0% for institutional-quality assets. The third quarter represents the tightest spread between major markets and secondary markets as yield-driven capital continues to flow into secondary and tertiary markets.
Rent Growth Nationwide rent growth remains flat at 2.3% while still positive. Western metros such as Phoenix, Sacramento, San Diego and Seattle continue to lead the nation in rent growth as they benefit from strong demographic and economic tailwinds.
Supply and Demand New supply is anticipated to peak in 2017 with over 389,000 units delivered throughout the United States. This cycle has been heavily weighted toward urban infill and luxury product compared with the previous cycle which was dominated by Class B suburban assets.
International Capital International capital sales volume rose to $11.3 billion over the past 12 months. High net worth and sovereign wealth funds are increasingly growing their multihousing portfolios through indirect investment vehicles and joint ventures with domestic sponsors.
Debt Markets Debt outstanding increased $21.7 billion to $1.2 trillion with Agency & GSE lending accelerating 2.5% quarter-over-quarter compared to the broader market of 1.8%. Debt capital remains plentiful for well-positioned assets despite a slowdown in the CMBS market.

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