ARA’s Mid-Year Multifamily Transaction Volume Increases 11%
- Aug 19, 2008
By Anuradha Kher, Online News EditorAtlanta–In the midst of the housing crisis, Apartment Realty Advisors (ARA) has revealed that its mid-year national multi-housing transaction volume has increased 11 percent over the same period last year, equaling $2.6 billion.In a recently released report by Real Estate Alert, ARA was ranked number two nationally for multifamily production, right behind CBRE. The gap in production value for the two companies was $186 million as compared to last year’s mid-year figures when CBRE’s multifamily volume totaled $6 billion as compared to ARA’s volume of $1.9 billion. ARA attributes the increased transaction volume to several factors. “ARA is made up of series of regional and city-based companies with experienced brokers who have a strong following with clients. This helps withstand the tough markets such as the one we are in right now,” Gary Kachadurian, chairman of ARA, tells MHN. “We focus on multifamily, which is doing well. Fannie Mae and Freddie Mac have provided financing for our buyers and have helped transactional activity through this time.”ARA’s Texas operations, comprised of offices in Austin, Dallas and Houston, continue to be a hot-bed of activity where market fundamentals are still very strong and buyer interest is still high. ARA’s Houston office alone reported a sales volume increase of 118 percent over the same period last year. According to ARA’s David Mitchell, principal in the Houston office, “We’re one of the few markets in the country that’s experiencing healthy employment growth – largely due to the strength of the city’s energy and healthcare sectors which continue to fuel demand for housing, among other things.”He also pointed out that while core deals are few and far between, they’re closing a higher volume of value-add deals that continue to garner a high ratio of offers.Kachadurian explains, “The reason value-add properties have been doing well in the last four or five years is that investors are targeting higher yields. The stories behind value-add properties are compelling, with investors being able to achieve higher returns by rolling up their sleeves and improving the assets.” Additionally, ARA’s Mid-Atlantic office saw a 9 percent increase in sales over the same period which they attribute to several factors – a higher volume of transactions and strong property appreciation on the properties they’ve sold on behalf of owners during the first half of the year.According to Blake Okland, principal in ARA’s Charlotte office, “While the number of transactions was up by 44 percent for the same period last year, what really fueled the increase in production volume was the average transaction size; many of the properties that sold during the first half of the year had experienced solid NOI growth over the last 36 months, contributing to substantial appreciation and an increase in the average deal size over previous periods in the Carolinas.”Additionally, transactions on multifamily properties trading in the $10 million-and-under range increased by 33 percent over the same period last year.“We expected this year to be on par with ’07 because the for-sale housing crisis did not really affect us adversely. In fact renters are continuing to stay renters and many potential homebuyers who cannot obtain mortgages are choosing to rent as well. In addition, the children of baby boomers are coming out in the apartment market in a big way,” says Kachadurian. “It’s hard to predict how much we will close by end of the year. Interest rates and the outcome of the presidential election will determine a lot of it,” he concludes.