The Savvy Investor’s Top 3
Here’s what apartment investors in the South Puget Sound need to know this month.
2023 Q1 Apartment Market Report – Just Released
My largest takeaway from our Market Report looking back at 2022 was that although there were only 50 apartment sales in Pierce County (Lowest since 2012) we saw continued strong cap rate compression with an average cap rate of 4.4%.
Our Team went to the National Multifamily Housing Conference
We conducted over 50 meetings in 2 days. Here are our three main takeaways.
- The supply of for sale apartments is extremely low. We see buyers with a lot of “dry powder” but market is not currently being tested with apartments for sale.
- Sellers want a 4.5% cap rate. Buyers want a 5% cap rate. Be the 4.75% cap rate buyer as we will look back on 2023 and these will be the good buys!
- Buyers want sales comps to justify their offers. Be the first one on the dance floor. “Be fearful when others are greedy and greedy when others are fearful” – Warren Buffet.
What should you pay for apartments and debt?
If only there was a magic formula to understand what to pay for an apartment building!
SOUTH KING RENT AND VACANCY INSIGHT
The story of South King County has been that of extremely high occupancy as rents slowly increase year-over-year. And, with the light rail soon becoming a reality and new apartments beginning to get absorbed into the area, South King’s occupancy levels will be tested in 2023.