Dive Brief:
- For the first January in three years, apartment deal volume rose, increasing 9% year over year to $8.1 billion, according to a report that data firm MSCI Real Assets shared with Multifamily Dive.
- Price declines continued to moderate, as values dropped only 1.6% YOY, according to MSCI. Over the 12 months ending in January, the average cap rate stood at 5.6% — a significant increase from the 4.7% low-water mark set in 2022.
- Individual asset sales grew 7% to $6.3 billion, while portfolio and entity-level transactions increased 16% to $1.8 billion. Garden properties increased 19% to $4.5 billion and mid- and high-rise building trades fell 2% to $3.6 billion.
Dive Insight:
Even with the positive momentum, MSCI noted that the apartment sales market is
still not as liquid as it was before the pandemic. For each January from 2015 to 2019, an average of $12.8 billion was traded during the month — $4.7 million more than the first month of 2025.
However, there are signs that MSCI transaction numbers will jump in the coming months. Last week, New York City-based alternative asset manager Apollo Global Management bought Bridge Investment Group Holdings in an all-stock transaction with an equity value of approximately $1.5 billion.
Salt Lake City, Utah-based Bridge has approximately $50 billion of assets under management, primarily across the industrial and residential sectors and other specialized real estate asset classes. In the most recent National Multifamily Housing Council Top 50, the firm ranked No. 18 with 54,999 units.
In addition, two REITs could be on the market. In February, Bethesda, Maryland-based REIT Elme Communities “initiated a formal evaluation of strategic alternatives to maximize shareholder value,” according to its fourth-quarter earnings release earlier in February.
Elme’s board of trustees is working with independent financial and legal advisors to assess all options. However, there is no assurance that the process will result in the REIT pursuing a transaction or any other strategic outcome.
In January, the board of directors for Aimco decided to explore alternatives to “unlock and maximize shareholder value” for the Denver-based REIT, which could include a sale or merger of the company. The REIT’s board also discussed the possibility of selling the major components of the business in one or a series of transactions and accelerating individual asset sales.
Other REITs are looking to be buyers this year, according to their recent fourth-quarter 2024 earnings calls. For instance, Houston-based Camden Property Trust indicated it was switching to a more aggressive posture this year.
“As the headwinds in recent years turn into tailwinds in 2025 and beyond, there are attractive opportunities for us to continue development starts and to pursue acquisitions,” CEO Ric Campo said on the call in February.
Campo compared this period to the time following the global financial crisis of 2007-2009 when the REIT acquired $2.7 billion in apartments with an average age of four years, sold $3.8 billion of properties with an average age of 24 years and developed $4.2 billion of new projects.
“Recycling capital in this way keeps our portfolio competitive, lowers capital expenses and accelerates our return on invested capital, driving long-term core FFO growth,” Campo said.
Click here to sign up to receive multifamily and apartment news like this article in your inbox every weekday.
