October’s $10.1 billion total was boosted by the 64 properties that Greensboro, N.C.-based Bell Partners and New York-based DRA sold to Lone Star for $1.8 billion, which is the largest transaction so far this year. The 64 properties sold by DRA/Bell to Lone Star were originally part of a purchase made by DRA/Bell in 2008 of 86 apartment communities across the U.S., totaling 25,684 units, from Denver-based UDR. The transaction was the largest in the multifamily industry in that year.
Given the number of garden properties in the Lone Star buy, it’s not surprising that garden properties jumped 29 percent year-over-year in October. Sales of mid- and high-rise properties fell 31 percent.
The volume in the garden sector pushed cap rates down to below 6.5 percent in that category. Overall, cap rates were under 6 percent nationally with yields tightening to the 3 percent range in California and New York City.
Those numbers fit with what was reported in the Moody’s/RCA CPPI, which saw property prices increase 5 percent in the third quarter and 16 percent over the past year. The biggest gains have been in tertiary markets in the Southwest, showing that investors are looking further out for yield. But the high-barrier Northeast/Mid-Atlantic area, turbulent South Florida, and the NYC Boroughs showed that investors still value core, as well.