Investors Favor City Apartments Over Suburban Communities

Posted on 19. Jan, 2012 by Bryan Ives in News

Apartment building sales continue to remain strong, but in some areas investors are opting to invest in properties in cities rather than the suburbs. Two deals in the Boston area serve as a prime example.

According to Simon Butler, an executive director at Cushman & Wakefield, a 1,020- unit apartment complex with over 90% occupancy in the suburb Framingham, Mass. sold for $128 million, just below what it sold for in 2007 at $130 million. Charleston, S.C.-based Greystar Real Estate Partners acquired the property from JPI of Irving, Texas.

On the other hand, a 232-unit Cambridge, Mass., apartment property recently sold for $64.9 million, above the $55.8 million price it traded for back in 2006, according to Real Capital Analytics.

“You get stronger pricing in the city because there’s a perception that there will be stronger rent growth,” says Butler. Butler represented sellers in both transactions and the sellers renovated both properties. According to Dan Fasulo, managing director at Real Capital, some of the higher prices are found in urban areas while property value recovery in suburbs continue to experience slower growth.

Source: http://online.wsj.com/article/SB10001424052970203436904577153191559355760.html

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