Think class B: Secondary-market, infill multifamily properties can generate institutional-quality returns in 2017
The economic and real estate recovery following the 2008 global financial crisis has been steady, if slow, and, when combined with record-low interest rates, has generated all-time highs for trophy assets and new residential projects, as well as other property classes.
But in recent months, prices of institutional-quality class A residential projects have flatlined in many cities. The clues are many. As of February, for example, year-over-year apartment rents were lower in Miami, San Jose and San Francisco, and all but flat in Boston and New York City, reported Apartment List. Most of the largest U.S. metros are reverting to modest growth levels, according to Yardi Matrix Monthly. National multifamily sales transaction volume in January and February was down 63 percent and 22 percent, respectively, year-over-year, noted Real Capital Analytics. And values for U.S. commercial real estate as a whole started going sideways in August 2016, according to property consultants Green S