Document 6510045

Source: CoStar, Inc
(The Copyright report contains research licensed to AOA
Commercial Brokerage)
The multi-family market recovery is “top-down”, i.e., there
is a market divergence between
the quality of assets. The market
has firmed up for class “A” and
“B+” larger assets in better markets. The cap rates are decreasing and real prices (cost per unit)
have increased. However, class
“C” and smaller assets cap rates
are still flat to deteriorating,
especially in tertiary markets.
As anticipated, the demand for
Class “B” assets has increased
and will continue to do so for the
near future.
Co-Owned Investments
Post-Recession
Co-Owned properties include
Tenant-in-Common
(TIC’s) and Delaware Statutory Trusts (DST’s). While
… the multi-family sector
has been far more
resilient and in far better
shape in terms of
fundamentals than any
other asset type particularly office and
retail and even industrial.
no sector of the Real Estate
industry is recession proof,
the Co-Owned properties (un-
der SEC regulations) appears
to have weathered the storm
better than expected. This is
due in part to the historically
low loan to value ratio (LTV)
of 50%-60%, the transparent/
comprehensive due diligence
performed by both Sponsors
and Lenders prior to purchase,
experienced
professional
management, and the institutional quality of the properties. However, some asset
types are fairing better than
others - i.e., multi-family and
single tenant properties.
As mentioned previously,
the multi-family sector has
been far more resilient and
in far better shape in terms of
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(continued on page 68)
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67