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High markets to purchase, promote condominium buildings

Dive Transient:

  • Two Texas metros led the nation in condominium offers within the third quarter of 2022. Dallas posted probably the most condominium transactions for any metro space with $18.2 billion for the quarter, beating second-place Houston by about $6 billion, in response to MSCI, a agency that gives instruments and companies for the worldwide funding group. 
  • Houston, with $11.8 billion in gross sales, held the second spot. The 2 Texas metros have been adopted by Atlanta ($11.4 billion), Phoenix ($10.8 billion) and Los Angeles ($7.7 billion).
  • Manhattan, which jumped 17 spots to No. 7, posted $6 billion in gross sales, which is 3% off from its all-time excessive. It tallied 212% YOY particular person asset gross sales development from the third quarter of 2021 to the third quarter of 2022. “This bounce was not a case of traders immediately discovering Manhattan — the expansion in gross sales was a rebound after the pandemic pushed patrons to the sidelines,” MSCI mentioned within the report. 

Dive Perception:

Out of the highest 25 U.S. condominium markets, 16 set data for transactions in 2022’s third quarter, in response to MSCI. The remaining 9 posted gross sales ranges inside 5% of their all-time excessive. MSCI famous that the deal quantity wasn’t only a results of the huge Blackstone-American Campus Neighborhood merger. Seventeen metros would have handed their high-water mark based mostly on single-asset transactions and 4 extra have been inside 5% of their all-time excessive.

Markets with probably the most condominium gross sales in Q3
Metropolis Quantity (in billons) YOY change
Dallas $18.2 1%
Houston $11.8 47%
Atlanta $11.4 -3%
Phoenix $10.8 -1%
Los Angeles $7.7 14%

SOURCE: MSCI

Miami-Dade County, Florida, posted worth development of 31.3% YOY, main the tempo amongst main metros, and a 147% improve in deal quantity. Hire development is driving a lot of this worth appreciation and deal quantity.

South Florida has had a lot migration, and a number of these persons are high-income. Brickell and Miami Seashore — the middle of Miami — was fairly inexpensive relative to New York, Los Angeles and San Francisco,” Max Sharkansky, managing companion of Trion Properties, a multifamily funding sponsor and private-equity actual property agency based mostly in West Hollywood, California, and Miami, informed Multifamily Dive earlier this yr. “Now these rents have successfully doubled by way of COVID-19.”

Texas deal drivers

Dallas additionally stood out for claiming the highest spot for transaction quantity and posting one of many prime markets — 24.5% — for worth development. Shakti C’Ganti, founder and CEO of Dallas-based condominium proprietor and operator Ashland Greene, is a proponent of the realm, the place he owns roughly 5,300 models.

“We now have a very numerous employer base, and we’re not depending on one particular sector like oil and fuel or healthcare,” C’Ganti mentioned. “And we nonetheless have firms which are shifting right here. Goldman Sachs goes to be shifting right here. Caterpillar simply introduced a short time in the past that they’re shifting right here. So, we nonetheless have to deal with all these workers.”

These job fundamentals have helped entice condominium companies, like Magma Equities, into the Dallas-Fort Price space. The Manhattan Seashore, California-based agency, in its first three way partnership with Walker & Dunlop Funding Companions, not too long ago acquired two properties, totaling 820 models in Houston and the Fort Price submarket of Roanoke.

“We made a powerful push to develop our portfolio in Texas,” Magma Director of Acquisitions Scott Ogilvie informed Multifamily Dive. “Traditionally, Dallas and Fort Price have confirmed to be probably the most resilient markets throughout financial headwinds. Plenty of that has to do with the quite a few demand drivers available in the market — company migration, robust faculty techniques and variety among the many employment base, coupled with the truth that Texas is such a business-friendly atmosphere.”

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