One of the sharpest minds in the real estate business, and more specifically the apartment market, believes now is the time to sell: Sam Zell Edges Out of Apartments
The reality is that interest rates are going to rise, and the question is will the value of multifamily properties decrease as a result: Multifamily Prices Could Stall With Interest Rate Hike
Cap rates rise as interest rates rise, just as they have decreased as interest rates have dropped. The following chart illustrates the impact that a 50 bps increase in interest rates would have. In this example, we used an NOI of $500,000 and a cap rate of 6.5%. As you can see, a 50 bps increase in interest rates would result in a decline in value of nearly $550,000, which is more than 7% of the property value.
If you are considering selling in the next 2-3 years, now is the time to consider putting your property on the market in order to maximize value. Call us today at 215-531-7000 to discuss a strategy, and take advantage of our complimentary property valuation.