Commercial Investment Real Estate is the magazine of the CCIM Institute, the leading provider of commercial real estate education. CIRE covers market trends, current developments, and business strategies within the commercial real estate field.
Issue link: http://cire.epubxp.com/i/92705
Tertiary Markets 0.0 0.5 1.0 1.5 2.0 $2.5 8% Volume (in billions) Average cap rate 0 1 2 3 4 5 6 7 America. In addition, devel- opers acquired more than $2 billion in multifamily devel- opment sites in 1H2012, nearly double the volume for all of 2011, according to RCA. However, much of this activity is still concentrated in major metros and strong secondary markets such as Seattle and Raleigh, N.C. Research firm Axiomet- rics is tracking 800,000 mul- tifamily units that are still in the planning stage, but new deliveries are expected to total only 87,000 units and 129,000 units in 2012 and 2013, respectively. What's the holdup? Part of the problem is that developers are focused on more-diffi cult sites. photo — at auction for $10,000. When he showed it to a local Realtor, he was told it was worth $30,000 or more." T ere is hope, however, that multifamily deals will surge before year-end in these and other markets. McConnell says that reluc- tant sellers, who otherwise might not have considered selling until next year or beyond, could be spurred on by the potential capital gains tax increase. And some uncertainty remains about just how long this seller's market will last. Fresh Units Owners of existing multifamily product might also be motivated by the new supply that's poised to come on line during the next few years. New multifamily construction increased 45 percent YOY in July, according to the Associated General Contractors of Statement of Ownership Commercial Investment Real Estate Publication Number 1524-3249 Filing Date: 10/1/12 Published bimonthly by the CCIM Institute, an affi liate of the National Association of Realtors, 430 N. Michigan Ave., Suite 800, Chicago, IL 60611-4092. Publisher and Executive Editor: Sara Drummond Annual Subscription Price: $45 for nonmembers, $55 for Canada/Mexico Extent and Nature of Circulation Total Number of Copies Paid and/or Requested Circulation Paid/Requested Outside-County Mail Subscriptions Paid In-County Subscriptions Sales Through Dealers and Carriers, Street Vendors, Counter Sales, and Other Non-USPS Paid Distribution Other Classes Mailed through the USPS Total Paid and/or Requested Circulation Free Distribution by Mail Outside County In-County Other Classes Mailed Through the USPS Free Distribution Outside the Mail Total Free Distribution Total Distribution Copies not Distributed Total Percent Paid and/or Requested Circulation Average No. Copies Each Issue During Preceding 12 Months Date 13,714 12,421 0 0 21 12,442 454 0 23 692 1,169 13,611 103 13,714 91% No. Copies of Single Issue Nearest to Filing (Sept./Oct. 2012) 13,871 12,446 0 0 5 12,451 356 0 6 888 1,250 13,701 170 13,871 91% "We are seeing more gravitation toward infi ll sites with much more density than the typical three-story garden-style walk-ups that peppered suburban markets in the last 20 years," Lance explains. "We think this trend will continue as the demand for infi ll is strong with prospective tenants, and most equity groups prefer it over suburban right now." Lance has participated in the sale of six South Florida multifamily sites since 2010, and several similar deals are in progress. Investors are probably wondering: What will happen when these units eventually come on line? Consider New Jersey, where builders are delivering 2,412 units this year, according to McConnell, a nearly fi vefold increase over 2011. "With the infl ux of new starts, investors are keeping a watchful eye on their older, existing product," Mc Connell says. "On the fl ip side, I believe the new developments will cater to the folks who would have been home buyers a few years ago. T e tenant going into the new product is in a diff erent income bracket than the tenant going into the older gar- den community." Demand for new properties is also driv- ing multifamily development in Knoxville. "T ough we already have some nice older 30 November | December | 2012 Commercial Investment Real Estate 08Q1 08Q2 08Q3 08Q4 09Q1 09Q2 09Q3 09Q4 10Q1 10Q2 10Q3 10Q4 11Q1 11Q2 11Q3 11Q4 12Q1 12Q2