November 2015 – MacLaren Group

Marcus & Millichap Releases 4th Quarter Apartment Research Market Report

Marcus & Millichap’s 4th Quarter Apartment Research Market Report has been released. Overall, the outlook of the Philadelphia apartment market remains bright as healthy economic factors continue to drive growth in the Philadelphia economy. The unemployment rate reached the lowest level since the recession, encouraging developers to accelerate the pace of construction. Tight market conditions have spurred steady and consistent rent growth, and both rent and occupancy rates are trending upward.

Click the link below to view the full report.

Philadelphia 1st Quarter Multifamily Research Market Report

Is Now The Time?

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.