1st Quarter Report
April 5, 2024 – Bloomfield Hills, MI
IPO is pleased to announce our 2024 First Quarter multifamily investment sales. Further overview statistics and a current market outlook are shared below.
The YTD transaction level has been muted due to continued adjustments to higher interest rates. Values are down from peak levels but still strong in many markets. Deals are still getting done as operating fundamentals are outstanding and the cost of capital is still reasonable from a historical perspective.
- Q1 closed with over $50M in transactional volume.
- 10 multifamily sales transactions; reflecting over 600 units in total.
- Notable Transactions include:
Clinton Township Portfolio, Clinton Township, MI: 326 units, $29,650,000
Grand Ledge Portfolio, Grand Ledge, MI 60 units, $3,650,000
Everybody is ready for a thaw; rates are projected to be cut two times, or up to four times, in 2024 depending on who is predicting. The Fed is committed to seeing firm evidence that inflation has curbed to their desired level before the rate cuts begin, but that can’t happen fast enough for market participants. We are handling calls daily from clients looking to explore a sale with capital events looming on the horizon. With billions of dollars of multifamily debt maturing over the next year, many important decisions are being made on whether to sell or refinance. We expect a bulk of inventory to find its way to the market, as that decision process inevitably unfolds over the next 18 months. Investors waiting for distressed opportunities may not want to hold their breath, as we do not expect to see significant changes in the distressed property market, as we did during the Great Recession of 2007-2009. There is ample equity and debt along with a sufficiently strong economy and operating fundamentals to weather the challenges without any meaningful amount of distress beyond overleveraged or low-quality assets with weak sponsors.
IPO is a brokerage that is made up of nimble and creative problem-solvers who navigate deals in challenging landscapes. We strive to be the best brokerage in the apartment industry and show this in everything we do. Our goal is to build partnerships that stand the test of time, deliver significant value for our clients, and in the process, create generational wealth. We would like to thank our clients for entrusting us with your multifamily investment brokerage needs. As you plan for 2024 and 2025, contact us and let us know how we can help you with any important investment decisions.