Portland's Multifamily Investment Landscape Transforms in Q4
Last year was overall a solid one for Portland's multifamily sector as multiple categories saw improvements, the latest market report from Colliers shows.
Particularly, transactions soared to 56 in the fourth quarter, up 116 percent year-over-year and 92 percent from the previous three-month period. Additionally, that figure is 16 percent above the half-decade average. Sales volume hit $645 million in the fourth quarter.
MG Properties led the way with the biggest purchase, acquiring a 350-unit property in Aloha/West Beaverton for $91.1 million. Security Properties, Inc. and BRIDGE Housing Corp were the second and third largest, with $78 million and $64.6 million purchases, respectively — both in the Northwest submarket.
Some 2,907 units were absorbed, up from the 2,541 in the previous three months. That's a major turnaround from the -419 seen in the same period a year ago.
Occupancy has continued to gradually improve, reaching 94.9 percent in the fourth quarter, up from 94.4 percent at the end of September and 93.8 percent in the 12 months prior.
To some of the less-than-ideal trends, rents averaged $1,736 per month in the fourth quarter. While that inched up 1.5 percent year-over-year, it represented a pullback from the third quarter's $1,758. Also, new supply continued to increase, reaching 1,908 compared with 632 units a year ago and 1,554 in the third quarter. Additionally, cap rates ticked up 50 basis points in the fourth quarter. Overall, the category averaged six percent in 2024, up from 5.6 percent in 2023.
"As the Federal Reserve continues to address inflation, reductions will influence the 2025 outlook for investors, shaping funding decisions and driving momentum in multifamily investment sales," Colliers wrote.
But uncertainties remain. Over rising inflation expectations, the central bank has hinted it could cut interest rates at a slower pace in 2025.
Source: GlobeSt/ALM