Dive Brief:
- Apartment sales increased 22% year over year to hit $146 billion in 2024, according to a report that data firm MSCI Real Assets shared with Multifamily Dive.
- Prices continued falling in 2024, but the rate of decline moderated. The RCA CPPI, a measure of apartment prices, dropped 4.2% relative to the fourth quarter of 2023. By comparison, the steepest decline during this cycle was a 13.3% drop in Q3 2023.
- Cap rate increases also moderated, rising only 10 basis points over the 12 months from Q4 2023 to Q4 2024. By comparison, they increased 70 basis points from Q4 2022 to Q4 2023.
Dive Insight:
The increase in 2024 transactions was about more than just New York City-based investment manager Blackstone’s $10 billion purchase of Denver-based Apartment Income REIT Corp. in June, according to MSCI.
Individual asset sales grew 12% to $110.9 billion after a strong 47% increase to $37.5 billion in Q4. Portfolio and entity-level transactions increased 54% to $35 billion in 2024 after growing 261% to $7.9 billion in Q4.
New York City- and Los Angeles-based apartment owner Standard Communities’ acquisition of over 6,000 units in more than 60 communities was the largest portfolio trade of Q4.
Mid- and high-rise sales increased 35% to $62.9 billion YOY in 2024, while garden deals rose 13% to $83 billion. In Q4, mid- and high-rise skyrocketed 78% to $18.8 billion, and garden deals jumped 55% to $26.6 billion.
Though 2024 was only the second year out of the last five to see sales increases, many investors are confident there will be more trades in 2025. In a recently released survey from Los Angeles-based commercial real estate services firm CBRE, 70% of commercial real estate investors surveyed said they planned to buy more assets in 2025 than last year.
Seventy-two percent of investors told CBRE they preferred multifamily, far ahead of the 37% who favored industrial and logistics — the second most popular sector.
“Investors are preparing to deploy more capital into the U.S. commercial real estate market this year, drawn by the attractive pricing environment and strong fundamentals,” said Kevin Aussef, Americas President of Investment Properties for CBRE, in the news release.
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