Annual Investment Volume Peaks in Q4

  • The Portland region’s $557M of multifamily investment transaction volume in Q4 2017 represented a peak for the year. This is in line with the typical seasonal trend of elevated sales activity in the second half of each year.
  • Although sales volumes set historical records in 2015 and 2016 at $2.4B and $3B respectively, Portland’s strong demographic fundamentals and limited land supply continue to support the viability of the local multifamily investment market. Transaction volume for the year totaled $1.34B as some institutional investors slowed their acquisition programs while regional and local investors continued taking positions in the market. 2017’s sales volume may signal movement toward a more balanced market.
  • This quarter, Colliers Portland Research introduces a new suite of transaction analytics charts on page two, and an expanded table of market statistics on page three. In the market statistics, readers will note year-over-year occupancy declines in 3- and 4-bedroom units in suburban counties. There may be a correlation in these figures with recent increases in home ownership rates, as seen in the final chart on page three.
  • In some surveyed geographies, effective rental rates declined during 2017. This includes the overall rental rate for all unit types throughout the MSA. The final chart on page two shows both declining effective rental rates and declining occupancy (although both are up slightly over the year, compared to Q4 2016). These declines are natural outgrowths of the intersection of supply and demand, as the current development cycle has expanded the region’s housing inventory. The majority of this development has taken place in the City of Portland.
  • As the region’s population continues to grow and demand ever more housing, City of Portland regulators—through the Inclusionary Housing program—may be risking a market intervention that could lead to a return to increasing rental rates. It may behoove local jurisdictions to work collaboratively with the private sector to find solutions that both foster affordability and support development.
     

Quick Fact: $557 Million

  • 38 Transactions
  • 2,337 Units