Arbor Realty Trust launches Arbor Small Multifamily Price Index
Arbor Realty Trust announced the creation of the Arbor Small Multifamily Price Index (ASMPI), in partnership with Chandan Economics, a provider of data and analytics to commercial real estate lenders, investors and policymakers.
The ASMPI is designed to measure the estimated average price appreciation on small multifamily properties with five to 50 units and with primary mortgages between $1 million and $7.5 million across the United States. The index compares model estimates of small multifamily rents and compares them against small multifamily cap rates.
“The Arbor Small Multifamily Price Index is a new and important tool that will allow investors to distinguish how properties in the small multifamily market are trending in comparison with other subsets of the real estate market,” said Ivan Kaufman, chairman and CEO, Arbor Realty Trust.
Given the widening gap between the supply and demand of affordable rental housing in the country, this newly available data aims to help find potential investment opportunities in the property sector.
“The Arbor Small Multifamily Price Index fills an important need in the marketplace for data analytics focused on small multifamily properties,” said Sam Chandan, founder, Chandan Economics. “With small multifamily properties making up about 32 percent of total U.S. rental inventory, this sector is becoming increasingly important to our nation’s workforce and we are pleased to work with Arbor to provide meaningful research and insight into this area.”
Initial estimates for small multifamily prices, as measured by the newly created ASMPI, are up 1.3 percent from the first quarter of 2019 and 6.9 percent from second quarter 2018. Since their post-recession low in 2010, small multifamily property prices have increased by more than 78 percent, and they are above their high from the previous cycle by 36 percent.
