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The apartment investment market continues to move toward higher returns. The "actual" capitalization rate for 5-unit and larger apartment sales in the Tri-county market (King, Pierce, and Snohomish counties) has been climbing steadily for the past two years. It reached its low point in October 2007, hitting 4.4%.
Since then, it has consistently inched higher every month and has been edging up above 6.5% in the past couple months. The last time capitalization rates were that high was late 2003. That's more than six years ago.
This trend comes from the new issue of our Weekly Apartment Investment Update, uploaded this morning for subscribers to our Apartment Advisor.
If you subscribe to The Apartment Advisor, log into your account to download the complete 5-page update.
We update our online database of 5-unit and larger apartment sales for our Apartment Investment Report subscribers every week, usually on Friday. It now includes sales as recent as February 16, 2010.
The "actual" capitalization tells us only a part of the story. It's also important for investors to look at the "anticipated" capitalization rate. When the anticipated rate is ...
