Multi-Family Property Market Update | September 2020

McGraw Commercial Properties Multi-Family Division sits down with Neil Dailey, to discuss the Multi-Family Market in Q3 2020.

McGraw Commercial Properties Multi-Family Division sits down with Neil Dailey, to discuss the Multi-Family Market in Q3 2020. Here are the highlights of the conversation:

The COVID-19 Pandemic’s Effect

Obviously, the biggest headline in 2020 has been the COVID-19 pandemic, and it has impacted every sector. Total transactions over the last six months are around $55 Billion, compared to a 2019 total of around $190 Billion. Lending is also shifting from new purchases to refinances as we continue to see record low interest rates, to the tune of 73% of new loans being refinances (up 61% from 2019).

Renter Activity During 2020

Within the Tulsa market and surrounding areas, the occupancy rate and collections are both high and outpacing last year! Another great trend for the Tulsa market is that people from the coast are moving more to the midwest.

Post-COVID Trends in Multi-Family

As investors plan for the future, we are expecting our sector to stay strong. For investors, a property with opportunity and 100+ units is recommended. Properties with 100+ units tend to be the most popular as well, depending on the investor group.

What Are the Trending Cap Rates?

Overall CAP rates really haven’t compressed or increased as people thought. The national average is 5.4%, which could change over the next 6 months. Across the classes, 5-5.5% for class A, 5.75-7% for class B, 7.5%-8.5% for class C.

Bottom, line it’s definitely a good time to invest!