Cap Rate Trends in the Apartment Market /  2013 Q2 -2018 Q2  / National and by Region.

 

 

 

“You miss 100 percent of the shots you never take, and if you think it’s expensive to hire a professional to do the job, wait until you hire an amateur “ . ARE YOU READY TO SELL OR PURCHASE YOUR LAND OR COMMERCIAL BUILDING IN PHOENIX, SCOTTSDALE, MARICOPA COUNTY AND PINAL COUNTY, ARIZONA,  CLICK HERE  AND PLEASE CALL ME.    

Office / Direct : 602-759-1209 , cell: 520-975-5207 or email me walterunger@ccim.net.  ….  VIEW ALL OF WALTERS LISTINGSLet me know if you are interested in Apartments: CLICK HERE FOR APARTMENTS FOR SALE     

The declining trend in apartment cap rates is a familiar, yet still unexpected story, given that the Fed has raised its overnight borrowing rate by 25 basis points in each of the last three quarters and in six of the last seven quarters (from 0.5% to 2.0%). Not only did the average apartment cap rate decline in the quarter by 20 basis points to 5.5% (the lowest ever), it has also declined in four of the last five quarters. This phenomenon is defying the conventional wisdom that cap rates move with interest rates.

There are two likely reasons for this trend. First, the data is subject to selection bias: cap rates are calculated based on properties that traded in the quarter. Very often, sales are heavily weighted by higher-end properties in high-priced markets. This may be the case, given that the mean transaction value per square foot increased to $169,000 in the quarter – the second highest ever and above the previous quarter’s average of $165,000. Overall transaction volume fell to $17 million from below $21 million in the first quarter, and an average of $22 million per quarter in 2017. This means that larger properties traded in the quarter and these generally have lower cap rates than smaller properties. The other reason that cap rates fell in the fourth quarter is likely due to an investor preference for this asset class over other property types. Although the average apartment vacancy rate increased to 4.8% from 4.3% a year ago, the effective rent growth was positive at 1.3% in the quarter and 4.1% for the year. Thus, despite the increase in construction, the apartment market remains healthy and in demand for investors.

The 12-month rolling cap rate also fell 20 basis points to 5.6% in the quarter- also the lowest ever. The red line in this chart clearly shows a declining trend in apartment cap rates over the last three quarters after it had stagnated at 6.0% for the previous six quarters.

Although most cap rates should start to increase in line with the jump in the ten-year treasury note, the apartment cap rates will likely stay disproportionately lower than other property types over the next few quarters, as this remains a preferred asset class.

Apartment Market: Cap Rate Trends by Region

Apartment cap rates are declining across most of the U.S. outside of the Midwest.

2

The Southwest region, which is dominated by Texas, has the highest cap rates; the hurricanes in 2017 pushed cap rates higher at the end of the year, but rates have corrected in the last two quarters. The Southwest region accounts for only 8% of the total U.S. sales volume. Cap rates for the South Atlantic region, shown in blue here, are 40 basis points higher than the U.S. average. Meanwhile, the Midwest cap rates, which are usually in line with the national average, have been higher over the last two quarters. The Northeast cap rates declined in the first quarter, but then held steady in the second quarter (they had been flat in 2017). New York City dominates the Northeast statistics, accounting for close to 24% of the total volume, on average. The rolling average cap rate fell 30 basis points in New York to 4.8% in the first quarter, but saw no change in the second. New York saw a slight decline in multifamily trading volume in the quarter, in line with the Northeast’s overall decline. In the West, cap rates fell to 5.1% from 5.2% last quarter. Los Angeles dominates these statistics with close to 27% of the overall volume. The rolling average cap rate in Los Angeles was unchanged in the quarter at 4.9%.

 

“You miss 100 percent of the shots you never take, and if you think it’s expensive to hire a professional to do the job, wait until you hire an amateur “ . ARE YOU READY TO SELL OR PURCHASE YOUR LAND OR COMMERCIAL BUILDING IN PHOENIX, SCOTTSDALE, MARICOPA COUNTY AND PINAL COUNTY, ARIZONA,  CLICK HERE  AND PLEASE CALL ME.    

Office / Direct : 602-759-1209 , cell: 520-975-5207 or email me walterunger@ccim.net.  ….  VIEW ALL OF WALTERS LISTINGSLet me know if you are interested in Apartments: CLICK HERE FOR APARTMENTS FOR SALE     

Timeline of Arizona from  900 BC – 2017              

WHY PHOENIX? AMAZING!!!  POPULATION – IN 1950 THERE WERE 331,700 PEOPLE LIVING IN PHOENIX – “NOW 5 MIL”. – “5TH. BIGGEST CITY IN USA”

PHOENIX TOPS US IN POPULATION GROWTH (MORE THAN LA, NYC) AND WHY THAT’S GOOD FOR THE ECONOMY, BUSINESS

FROM ME:                                                                      

Phoenix Commercial Real Estate and Investment Real Estate: Investors and Owner / Users need to really know the market today before making a move in owner user Commercial Properties, Investment Properties and land in Phoenix / Maricopa County, Pinal County / Arizona, as the market has a lot of moving parts today. What is going on socio-economically, what is going on demographically, what is going on with location, with competing businesses, with public policy in general — all of these things affect the quality of selling or purchasing your Commercial Properties, Commercial Investment Properties and Commercial and large tracts of Residential Land  Therefore, you need a broker, a CCIM (Certified Commercial Investment Member) who is a recognized expert in the commercial and investment real estate industry and who understands Commercial Properties and Investment Properties. I am marketing my listings on Costar, Loop-net CCIM, Kasten Long Commercial Group.  I also sold  hundreds millions of dollars’ worth of  Investment Properties / Owner User Properties in Retail, Office Industrial, Multi-family and Land in Arizona and therefore I am working with  brokers, Investors and Developers. I am also a CCIM and through this origination ( www.ccim.com ) I have access to marketing not only in the United States, but also internationalClick here to find out what is a   CCIM:   https://en.wikipedia.org/wiki/CCIM 

PLEASE CALL ME –  Office: 602-445-4113,  Direct : 602-759-1209 , cell: 520-975-5207 or email me walterunger@ccim.net

“You miss 100 percent of the shots you never take, and if you think it’s expensive to hire a professional to do the job, wait until you hire an amateur “ . ARE YOU READY TO SELL OR PURCHASE YOUR LAND OR COMMERCIAL BUILDING IN PHOENIX, SCOTTSDALE, MARICOPA COUNTY AND PINAL COUNTY, ARIZONA,  CLICK HERE  AND PLEASE CALL ME.     

Office: 602-445-4113,  Direct : 602-759-1209 , cell: 520-975-5207 or email me walterunger@ccim.net.  ….  VIEW ALL OF WALTERS LISTINGSLet me know if you are interested in Apartments: CLICK HERE FOR APARTMENTS FOR SALE     

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WEEKLY LAND CLOSING UPDATE / THROUGH October 12, 2018 / Phoenix Arizona Metro, Maricopa County, Pinal County.

WEEKLY LAND CLOSING UPDATE / THROUGH October 5, 2018 / Phoenix Arizona Metro, Maricopa County, Pinal County.

WEEKLY LAND CLOSING UPDATE / THROUGH September 28, 2018 / Phoenix Arizona Metro, Maricopa County, Pinal County.

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WEEKLY LAND CLOSING UPDATE / THROUGH September 14, 2018 / Phoenix Arizona Metro, Maricopa County, Pinal County.

WEEKLY LAND CLOSING UPDATE / THROUGH September 7, 2018 / Phoenix Arizona Metro, Maricopa County, Pinal County.

WEEKLY LAND CLOSING UPDATE / THROUGH August 31, 2018 / Phoenix Arizona Metro, Maricopa County, Pinal County.

WEEKLY LAND CLOSING UPDATE / THROUGH August 24, 2018 / Phoenix Arizona Metro, Maricopa County, Pinal County.

WEEKLY LAND CLOSING UPDATE / THROUGH August 17, 2018 / Phoenix Arizona Metro, Maricopa County, Pinal County.

WEEKLY LAND CLOSING UPDATE / THROUGH August 10, 2018 / Phoenix Arizona Metro, Maricopa County, Pinal County.

WEEKLY LAND CLOSING UPDATE / THROUGH August 3, 2018 / Phoenix Arizona Metro, Maricopa County, Pinal County.

WEEKLY LAND CLOSING UPDATE / THROUGH July 27, 2018 / Phoenix Arizona Metro, Maricopa County, Pinal County.

WEEKLY LAND CLOSING UPDATE / THROUGH July 20 , 2018 / Phoenix Arizona Metro, Maricopa County, Pinal County.

WEEKLY LAND CLOSING UPDATE / THROUGH July 13, 2018 / Phoenix Arizona Metro, Maricopa County, Pinal County.

WEEKLY LAND CLOSING UPDATE / THROUGH July 6, 2018 / Phoenix Arizona Metro, Maricopa County, Pinal County.

WEEKLY LAND CLOSING UPDATE / THROUGH June 29, 2018 / Phoenix Arizona Metro, Maricopa County, Pinal County.

WEEKLY APARTMENT CLOSING UPDATE THROUGH October 12, 2018, Phoenix Arizona Metro.

WEEKLY APARTMENT CLOSING UPDATE THROUGH October 5, 2018, Phoenix Arizona Metro.

WEEKLY APARTMENT CLOSING UPDATE THROUGH September 28, 2018, Phoenix Arizona Metro.

WEEKLY APARTMENT CLOSING UPDATE THROUGH September 21, 2018, Phoenix Arizona Metro.

WEEKLY APARTMENT CLOSING UPDATE THROUGH September 14, 2018, Phoenix Arizona Metro.

WEEKLY APARTMENT CLOSING UPDATE THROUGH August 31, 2018, Phoenix Arizona Metro.

WEEKLY APARTMENT CLOSING UPDATE THROUGH August 24, 2018, Phoenix Arizona Metro.

WEEKLY APARTMENT CLOSING UPDATE THROUGH August 17, 2018, Phoenix Arizona Metro.

WEEKLY APARTMENT CLOSING UPDATE THROUGH August 10, 2018, Phoenix Arizona Metro.

WEEKLY APARTMENT CLOSING UPDATE THROUGH August 10, 2018, Phoenix Arizona Metro.

WEEKLY APARTMENT CLOSING UPDATE THROUGH August 3, 2018, Phoenix Arizona Metro.

WEEKLY APARTMENT CLOSING UPDATE THROUGH July 27, 2018,  Phoenix Arizona Metro.

WEEKLY APARTMENT CLOSING UPDATE THROUGH July 20, 2018,  Phoenix Arizona Metro.

WEEKLY APARTMENT CLOSING UPDATE THROUGH July 13, 2018,  Phoenix Arizona Metro.

WEEKLY APARTMENT CLOSING UPDATE THROUGH July 6, 2018,  Phoenix Arizona Metro.

WEEKLY APARTMENT CLOSING UPDATE THROUGH June 29, 2018,  Phoenix Arizona Metro.

WEEKLY APARTMENT CLOSING UPDATE THROUGH June 22, 2018,  Phoenix Arizona Metro.

 

Walter Unger CCIM

Senior Associate Broker

Kasten Long Commercial Group

5110 N 40th Street, Suite 110

Phoenix , AZ 85018

Office: 602-445-4112

Direct: 602-759-1209

Cell:    520-975-5207

Fax:       602-865-7461

walterunger@ccim.net

www.Walter-Unger.com

www.KLCommercialGroup.com

View All My Listings

What is a CCIM.

 

8 Reasons You Should Invest in Land

Timeline of Arizona from  900 BC – 2017                                                                    

WHY PHOENIX? AMAZING!!!  POPULATION IN 1950 – 350 K PEOPLE; “NOW 5 MIL”. – “5TH. BIGGEST CITY IN USA”

PHOENIX TOPS US IN POPULATION GROWTH (MORE THAN LA, NYC) AND WHY THAT’S GOOD FOR THE ECONOMY, BUSINESS

CLICK HERE:  VERY COST EFFECTIVE SPONSORSHIPS AVAILABLE / South Scottsdale: Where the World Comes to Play and Innovative Companies Excel”

 

DOT – LOOP 202 / SOUTH MOUNTAIN FREEWAY / PHOENIX AZ – UNDER CONSTRUCTION

ARIZONA FACTS – YEAR 1848 TO 2013

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What is a CCIM.

CLICK HERE TO VIEW MY WEBSITE

  • DEMOGRAPHIC FACTS ABOUT MARICOPA COUNTY:
  • The average age of the population is 34 years old.
  • The health cost index score in this area is 102.1. (100 = national average)
  • Here are some of the distributions of commute times for the area: <15 min (22.7%), 15-29 min (36.8%), 30-44 min (25.1%), 45-59 min (8.6%), >60 min (6.8%).

PHOENIX PROJECTED AS NUMBER ONE US HOUSING MARKET FOR 2017

LIST OF ECONOMIC DEVELOPMENT PROJECTS IN PINAL COUNTY, REVISED 2-14-17

Reasons to Consider me for Commercial Referrals – I have the Knowledge and Experience                                                                                                                         

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Walter Unger CCIM –  walterunger@ccim.net   – 1-520-975-5207  –  http://walter-unger.com

2016 Official Arizona Visitors Guide

Visit Arizona

Why Phoenix?  This is a very interesting article, you should read it, amazing, there were only 350 K people living in Phoenix in 1950

Timeline of Phoenix, Arizona history

Phoenix, Arizona

Facts of Arizona – year 1848 to 2013

Feel free to contact Walter regarding any of these stories, the current market, distressed commercial real estate opportunities and needs, your property or your Investment Needs for Comercial Properties in Phoenix, Tucson, Arizona.

Walter Unger CCIM

Senior Associate Broker

Kasten Long Commercial Group

5110 N 40th Street, Suite 110

Phoenix , AZ 85018

Office: 602-445-4112

Direct: 602-759-1209

Cell:    520-975-5207

Fax:       602-865-7461

walterunger@ccim.net

www.Walter-Unger.com

www.KLCommercialGroup.com

View All My Listings

What is a CCIM.

Check out my professional profile and connect with me on LinkedIn.

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 Kasten Long Commercial Group tracks all advertised apartment communities, including those advertised by other brokerages.  The interactive map  shows the location of each community (10+ units) and each location is color coded by the size (number of total units). 

 Walter Unger CCIM, CCSS, CCLS

I am a successful Commercial / Investment Real Estate Broker in Arizona now for 20 years.  If you have any questions about Commercial / Investment Properties in Phoenix or Commercial /  Investment Properties in Arizona,  I will gladly sit down with you and share my expertise and my professional opinion with you. I am also in this to make money therefore it will be a win-win situation for all of us. 

Please reply by e-mail walterunger@ccim.net or call me on my cell 520-975-5207

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