Local apartment complex sales are dipping in down market - South Florida Business Journal:

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But things are noticeably more quiet these According to information compiledby Austin-based multifamily researcg firm , through the first nine months of 29 apartment communities — a total of 6,0489 units — changed By comparison, through the firsft nine months of 2007, 49 communitiesz — a total of 9,735 units had changed hands. The drivingt factor in the salea slump: The change in the capital markets, says Will Balthrope, seniort director for The of Marcus & Millicha p Real Estate Investment Services. The Dallas-based Balthropd Group specializes in multifamily dispositions for privatw andinstitutional sellers.
Banks and other lenders have tightenexd theirlending practices, which is making debt financingy scarce, Balthrope says. Meanwhile, equity requirements have alsobeen “Both shoes have dropped,” he adds. “Buyere simply have less to work with.” To date, The Balthrop e Group has negotiated 11 apartmentsalew — marking about a 40 percent drop from the rate of transactionz in 2007.
Casey Fry, an associate with the San Antonio/Austin officde of Atlanta-based (ARA), says that transaction activitgy in his division is down by abouf 45 percent compared to last The lack of capital has also put downwarr pressure on values for multifamily assetsas well, say Fry and Even in a market like San Antonipo — where the real estate fundamentals have been strongb — sellers “say their property is worth X, but the buyerf is only able to get financefd for Y,” Fry explains. the real estate market is in turmoil,” he “Speculation has been taken out ofreal estate.
” With the ask-bixd gap not poised to shrink any time many buyers and sellersa are sitting on the sidelines now, says Ryan a broker in the San Antoniok office of The Balthrope Group. As for thosr sellers that opted to put theirr properties onthe market, many have founr themselves in a harsh new world. As part of a new reporf on the country’s multifamily market, the research arm of the real estatefirm — compiledf case studies about specific properties in Texasd markets. In San Antonio, for example, a new multifamilgy property was marketed twice thisyear — once in and then in Over that period, the price of the propertyg declined by 12 percent.
Epstein’s advice to Make a commitment. “We’re seeing prices decreasse in a matterof months,” he says. “Sellersz need to be decisive.” “There is a no hope of a an overpaying buyer froma far-awa y land,” Balthrope says. And every day that a sellef spends waiting forthat best-case scenario is another day that the selle is losing money on that adds Scott Weems, a broker with the San Antonio offic of Phoenix-based . Weems says that sales volumre to date for 2008 for his firm is down abougt 60 percent fromlast year.
But there’s a silver linintg in the gray clouds hanging over the locao multifamilyinvestment market, industry observerx contend. The city has continued to seejob growth, explains Balthrope, who also notes that over the past 20 the Alamo City’s apartmenft sector has hovered at an occupancuy rate of between 90 and 95 percent.