Transition to Value-Add Focus Drives Sale Activity

Overview

In 2016, the Twin Cities multifamily investment landscape has witnessed a significant shift from core/core+ to value-add in terms of transaction activity and investor interest. While 2015 included a number of notable new build and pre-sale transactions to institutional and private equity investors, 2016 would be best characterized as a flock to value-add deals.

Transaction Activity

While construction activity remains strong, the appetite for pre sale and recently stabilized product has waned to some extent. This is also seen in the more limited capital pipeline to fund new development, as projects are more heavily scrutinized and investors have become very selective about size, submarket and delivery timeline.

 

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