Are Class C Apartments Best Positioned for Economic Slowdown?
The institutional market is flush with capital and with the bidding frenzy, many are turning to the class C space to find a better cap rate, say panelists during a session at last week's national GlobeSt. Multifamily conference.
November 01, 2021 at 05:36 PM
4 minute read
Real Estate News
The original version of this story was published on Law.com
Despite the uncertainty within the market, class C properties are being touted as the best-positioned property for an economic slowdown by some experts in the market. During a panel discussion at the national GlobeSt. Multifamily conference in Los Angeles, panelists discussed the gap between rent rates for class A and class C properties and reviewed some of the current trends within class C properties.
According to Henry Manoucheri, chairman and CEO of Global Integrity Realty, the institutional market is flush with capital. There is a bidding frenzy in southern California as well as in places like Phoenix, Denver, and areas of Florida among other places, he explained.
"You will have 20 to 25 buyers on anything trading above $25 million. For some reason, all these sellers want to sell this year. It is crazy," he said. "But the $5 million to $15 million space isn't as competitive and you can pick up these smaller properties at probably about a 4 cap rate and there is a lot of upside."
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