Yearly Archives: 2018

Marcus & Millichap’s 2018 Multifamily North American Investment Forecast has been released. The report forecasts that rents will maintain their ascension trend, while regional investors will be attracted by higher yields. Rent growth will persist while widespread construction places upward pressure on vacancy. Additionally, investors will cast a wider net, targeting older properties. For more information about this, along with additional valuable market insight, take a look at the 2018 Multifamily North American Investment Forecast. Call us today to discuss how we can assist you with your strategy.

Existing single-family home sales increased a modest 1 percent over 2017 as limited for-sale inventory kept the market from gaining traction. While many of the factors contributing to a restriction in sales velocity remain the same, changes to the tax code remove some of the incentives to homeownership, and anticipated interest rate increases this spring will bring additional challenges to the future of the housing market.

The increases in the standard deduction to $12,000 and $24,000 for couples means fewer homeowners will realize a benefit from itemizing deductions on their taxes. The threshold home price at which itemizing offers the ability to lower a married couple’s tax liability has increased from about $200,000 to above $400,000, which is well above the median home price in most metros. Concerns about affordability and low savings rates will continue to drive demand for apartments as first-time homebuyers are largely affected.

Stronger economic growth could counter some challenges. Tax savings will flow through to individual tax payers, increasing take-home pay. While some will use this discretionary income to boost consumption, others may increase savings to purchase homes. Sales of new homes could help offset purchasing in the existing single-family home market. Last year, sales of new homes gained more traction, ending the year up 14.1 percent from 2016. However, the number of these homes that have yet to start construction continues to rise, reaching 32.6 percent of new-home sales in December. A construction backlog will benefit the rental market as those purchasing new homes extend stays in apartments.

Developing Trends:

• First-time homebuyers accounted for 32 percent of purchases in December. The rate has bounced around the high-20 percent to the low-30 percent span since mid-2010 and will likely stay in this range through 2018, remaining well below the 41 percent long-term average.
• The median existing single-family home price increased 5.8 percent over the last year to $248,100 in December, while the median new home price reached $331,400 after rising 2.5 percent annually. High land and materials costs, as well as a labor shortage, keep building concentrated in higher-end homes, and the spread between existing home prices and new home prices remains at one of its widest points.
• In 2018, apartment completions will ease from the 380,000 units delivered in 2017 to 335,000 apartments. About half of all additions are concentrated in 10 markets, and vacancy will remain tight throughout much of the country this year

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Marcus & Millichap is pleased to announce the sale of Dynasty Court – 56 units located in Center City Philadelphia.

Philadelphia, PA January 29, 2018 – Marcus & Millichap (NYSE: MMI), a leading commercial real estate investment services firm with offices throughout the United States and Canada, announced the sale of the Dynasty Court Apartments, a 56-unit apartment building located at 1003-1011 Race Street in Center City Philadelphia’s Chinatown neighborhood. The property consists of 56 units, five retail storefronts on Race Street, and 21 parking spaces. The asset sold for $16,600,000.

Andrew Townsend, first vice president investments, Ridge MacLaren, senior vice president investments and Clarke Talone, first vice president investments, all of Marcus & Millichap’s Philadelphia office, had the exclusive listing to market the property on behalf of the seller, a local partnership who developed the property in 1982. Townsend, MacLaren, Talone, and Philip Sharrow, associate in Marcus & Millichap’s Philadelphia office, represented the buyer, a local development company.

The property’s stellar location on Race Street in the heart of Center City Philadelphia drew the interest of investors from across the country.

“We had a tremendous amount of interest in this property due to the long-term intrinsic value of the asset,” said Townsend. “Dynasty Court is one of the largest multifamily properties in Chinatown, and over half the units are large multi-level townhouses.”

Townsend continued, “Our marketing process generated numerous offers from the local community and as far away as California. Ultimately, the buyer stepped up and paid over the asking price to secure the deal.”

Matthew Rosenberg, director in Marcus & Millichap Capital Corp.’s Philadelphia office, arranged the acquisition financing.

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About Marcus & Millichap (NYSE: MMI)

With over 1,700 investment sales and financing professionals located throughout the United States and Canada, Marcus & Millichap is a leading specialist in commercial real estate investment sales, financing, research and advisory services. Founded in 1971, the firm closed over 9,000 transactions in 2016 with a value of approximately $42.3 billion. The company has perfected a powerful system for marketing properties that combines investment specialization, local market expertise, the industry’s most comprehensive research, state-of-the-art technology, and relationships with the largest pool of qualified investors. To learn more, please visit: www.MarcusMillichap.com