The multifamily rental market is continuing to show rapid gains in strength in Frederick County, Maryland, as well as across the nation.
As reported in a recent post on the MacRo Report Blog this past March (5 Year Low in Apartment Vacancy Rates set in 2010), capitalization rates have fallen back into the low to mid seven percentage point range.
In the case of one of the most recent sales of the 108 unit Hunter’s Glen Apartments on Key Parkway in Frederick, which closed just two weeks ago at price of $64,815 per unit, it yielded a cap rate of about 6.89%. According to David Weber, the listing agent with Marcus & Millichap, the property was purchased by Home Properties, a REIT (real estate investment trust) that owns the nearby Elmwood Terrace Apartments and saw a synergy of management efficiency in the acquisition.
In a national report released by REIS.com last month researchers Dr. Victor Calanog, PhD and Ryan Severino CFA state that the “First quarter data shows that the relentless pace of recovery in the apartment rental sector was not stymied by typical seasonal weakness, nor by an unusually snow-heavy winter that might have prompted less households to move. National vacancies fell by 40 basis points, from 6.6 to 6.2 percent, as the sector posted positive net absorption of over 44,000 units. This is the largest increase in occupied stock in a first quarter period since 2000.” Read the complete Apartment Report.