5 properties sold for a total consideration of $24.0M in April ‘23. The median price per unit of these transactions was $263k and the average CAP rate was 3.91%, up from 3.82% in March ‘23. On average, of the properties that traded, the strike price vs. list price was 98.99%, in other words, we’re starting to see prices adjust downward accordingly to meet buyer’s expectations. The notable sale of the month was the sale of 94-289 Leonui St. in Waipahu, the 60 unit property traded for $11.5M or $191k per unit. Download the market comps below!
There are currently 42 properties on the market, totaling $147M in value. The average days on market is 99 days with the longest listed property still on the market for 325 days. The average CAP rate of these listings is 3.62%.
If you’re an active buyer, let me know if you’re interested in being added to my weekly inventory distribution. I also share information on the off-market opportunities that are available.
We’ve kept a close eye on the macro-economic data and how that impacts the local multifamily market. The Federal Reserve is scheduled to meet on June 14th and it’s widely anticipated that they will hike rates another 0.25%. The core CPI, which measures inflation rose 0.04% in April or 4.9% year over year, closer to the Fed’s 2.0% target. It’s important to note that the year over year increase in the shelter index is 8.1%. Are your rent increases keeping up with this trend? For context, if the current rent for a 1 bedroom is $1,500/month and if you increased rent by $50/month that’s only a 3% increase. If you increased rents in line with the shelter index of 8.1% increase, this would equate to an additional $121/month.
During uncertain economic times, apartment building owners must consider focusing their time, energy, and capital in shoring up the operations of their assets.
Here’s a short list of areas to improve on the operations side of the house:
- Improve Tenant Screening Process: To attract and qualify the A- credit tenants in the market, resulting in higher rents, less turnover, and more peace of mind.
- Tenant Relations: Implement a tenant relations strategy. Build community amongst your tenants, this will result in greater tenant satisfaction. Show how much you appreciate them by caring for the property and their concerns.
- Tackle Deferred Maintenance: If your plan is to hold the property long term, consider investing your capital back into the asset and address any outstanding maintenance items.
It pays to be creative in ways that you can improve the cash flow and value of your property. Feel free to give me a call to strategize before you implement.
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