Sales of multifamily housing is picking up nationwide, commercial practitioners say.
Buyers believe the sector is a sound bet because current prices are below construction costs in many cases and rental business is improving. Plus, there has been little additional development in the past couple of years and some industry analysts believe that shortly there will be a shortage in some markets.
Financing for apartment buildings is at a 50-year low, with seven- to 10-year mortgages available for as little as 4 percent.
The sector could face some pain. Yields are about 5 percent while a year ago investors were getting close to 6 percent with about a quarter of the transactions involving distressed sellers.
Source: The Wall Street Journal, Dawn Wotapka (09/22/2010)
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