September 1, 2020
Multifamily assets were the top performer in July, CREXi reported Monday, with new assets showing both a rise in average asking price per square foot and a contraction in cap rates. The average price per square foot for multifamily assets increased by 6.8% from June to July, while the average cap rate fell to 6.44%.
CREXi said the positive performance continues multifamily’s Q2 growth trajectory. After experiencing a sharp drop in valuations from March to April, the multifamily sector witnessed a 25% increase in price per square foot leading into July.
Even as some reports measured that a quarter of multifamily tenants would be impacted by mounting unemployment, the increased federal unemployment benefits and state and city moratoriums supported renters through the second quarter.
Notwithstanding an “altogether anxious” start to Q2, investor fears surrounding multifamily assets were assuaged by strong performance throughout the quarter continuing through July, said CREXi.
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