No Recorded Sales in January 2024
Sales volume got off to a slow start at the beginning of the year, with no recorded multifamily sales of 5+ units in January 2024. This is a clear indication that the cost of capital/higher interest rates has been affecting market velocity since the end of 2023 and into 2024.
Current Inventory Snapshot
There are 44 properties currently on the market for a total consideration of $190M, half of the properties have been listed this year. The average days on the market is 143 days and the average cap rate of deals listed on the market is 3.90%. There are 12 large assets of 20+ units that are currently on the market. There are also a couple of properties that have been re-listed as owners are looking to test the market after hitting the pause button towards the end of ‘23.
Our Hawaii Multifamily Inventory Sheet which tracks all the active listings, consolidated into one sheet is available weekly. If you're interested in being added to the distribution, simply reply to this email.
The market is in constant flux and thus your criteria for acquiring property may have changed as a result.
Please complete our 2024 Buyer Criteria Survey so we can be sure to provide you access to the deals that match your preferences.
Asset Management Tip – Self-Management Vs. 3rd Party Management
Managing a multifamily property is no small task, owners must weigh the pros and cons of self-management vs. 3rd party management. Below is quick comparison between the two.
Feature | Self-Management | 3rd Party Management | Cost | - Potential cost savings from avoiding management fees. | - Incurs management fees, increasing expenses. | | - Direct control over expenses like maintenance and repairs. | - Cost of management fees justified by expertise and time saved. | Control | - Full control over decision-making processes. | - Less control over day-to-day operations and decisions. | | - Ability to tailor management strategies to specific needs. | - Professional expertise offers guidance but may not align with owner preferences. | Expertise | - Requires diverse skill set; opportunity to learn firsthand. | - Access to professional expertise and specialized knowledge. | | - Potential lack of expertise in certain areas. | - Experience in dealing with various property management challenges. | Time Commitment | - Time-consuming, especially for larger buildings/portfolios. | - Outsourcing frees up time for other priorities. | | - Balancing management duties with other responsibilities. | - Focus on other aspects of investment or personal life. | Liability and Risk | - Personally liable for legal and financial issues. | - Transfer of liability to property management company. | | - Risk of overlooking legal requirements. | - Professional oversight reduces risk of costly mistakes. | Communication | - Direct interaction with tenants fosters relationships. | - Potential communication breakdowns between owner and manager. | | - Flexibility to address tenant concerns promptly. | - Lack of direct interaction may lead to misunderstandings. | Quality of Service | - May vary based on personal management skills. | - Quality may vary depending on property management company | | - Personalized attention may lead to stronger tenant relationships. | - Difficulty in finding a reliable property management firm. | Market Insights | - Reliance on personal networks for market insights. | - Better understanding of local market trends and rental rates. | | - Limited access to professional networks for specialized services. | - Utilization of effective marketing/leasing strategies. |
Everyone's situation is different, and priorities often change, but as a general rule of thumb, once your portfolio reaches a certain size i.e. more than 1 building or 15+ units, it is wise to consider hiring a 3rd party manager as you can see the benefits outweigh the costs.
Multifamily In the News
Agency Disputes Affordable Housing Loss Projection
CVS Health Invests $35M in Hawaii Affordable Housing Efforts
Modea Redevelopment Project Set to Offer More Affordable Housing Downtown
Gov. Green Kills Controversial Hawaii Housing Group
Networking Events
CCIM Lunch & Learn April 9th @ Morton’s - Outside of The Box Strategies For Families With Real Estate Investments
CCIM Networking Event April 19th – UH Baseball Game
If you know someone interested in investing or selling a multifamily property? Let me know!
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