February 21, 2019
Industrial may be the belle of the investment ball, but multifamily hit a new peak in 2018, according to NKF. U.S. sales volume for the year totaled $172.6 billion, representing 12.1% year-over-year growth and the highest annual total for multifamily on record.
Even as more than half the dollar volume came from non-major markets, where investors are pursuing value-add and higher yields, NKF says volume in major markets surged 24.8% Y-O-Y. Leading the way were increases of more than 40% in New York and San Francisco.
Nationally, cap rates decreased five basis points year-over-year to 5.4%. Yields between major markets and non-major markets continued to compress to near cyclical lows of 92 bps, according to NKF.
Annual effective rent growth increased 2.8% Y-O-Y. Las Vegas, Phoenix, Sacramento, Orlando and Tampa have experienced the strongest apartment rental growth in the U.S. over the past 12 months.
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