Following a morbid 2009, 2010 saw transactions pick up across the multifamily world. Nowhere was that more evident than in three of the hardest-hit markets in the country. According to Encino, Calif.-based Marcus & Millichap Real Estate Investment Services, these three markets at least doubled their sales volume from 2009: Las Vegas (up 142 percent); Phoenix (up 133 percent); and Detroit (up 100 percent).
“Markets like Phoenix, Dallas/Fort Worth, and South Florida became very active, and distressed sales by owners and lenders had a lot to do with that,” says Hessam Nadji, managing director of research and advisory services at Marcus & Millichap. “At the same time, many non-distressed sales also traded in these more challenging areas, but again, that was driven by a flight to safety.”
Take a closer look at the data, and you’ll see that things were so bad in 2009 that it didn’t take much to spark a 100 percent-plus increase in volume in two of the three metros: Las Vegas saw a 142 percent improvement on a mere 29 transactions, while Detroit recorded its 100 percent increase on 32 sales.
In particular, Nick Ingle, director of capital markets at the Phoenix office of Hendricks & Partners, says Vegas still has a long road to recovery. “I think there is so much distress that it’s surprising that not more properties have been offered for sale,” he says. “Everything in Vegas is in slow motion.”