Apartment sales volume finally turns positive as AIR-Blackstone deal closes

Dive Brief:

Apartment sales jumped 20% year over year to $38.8 billion in the second quarter of 2024, ending seven consecutive quarters of high double-digit declines in investment activity, according to a report that data firm MSCI Real Assets shared with Multifamily Dive.
On June 28, New York City-based investment manager Blackstone’s Blackstone Real Estate Partners X completed its $10 billion purchase of Denver-based Apartment Income REIT Corp. Without the deal, sales volume would have been down 11% in Q2, which would have still been better than the 68% drop in Q2 2023, according to MSCI.
The Real Capital Analytics Commercial Property Price Indices fell 7.5% year over year in the second quarter. Still, this is an improvement over the low point in this cycle, which was a YOY 13.3% decline in Q3 2023.

Dive Insight:

Mid- and high-rise apartment transactions jumped 45% to $19.6 billion in Q2, while sales of garden properties increased 3% to $19.2 billion. Powered by the Blackstone-AIR deal, portfolio sales jumped 92% to $15.6 billion.

Individual asset sales, often considered the bedrock of multifamily transactions, fell just 4% YOY to $23.2 billion. In Q2 2023, they were down 66%

While that level is below the $29 billion posted in each Q2 for the five years before the pandemic, it is only 8% lower than the worst year in that period. The MSCI report said the market could see sustained growth in the coming quarters.

Mike Green, CEO of multifamily investment firm Virtú Investments, also sees the market picking up in the West Coast markets that his Larkspur, California-based company targets.

“We have $500 million under contract now,” Green told Multifamily Dive. “So, we're going to be closing that pipeline through the end of September, and we’re seeing more people at those auctions.”

Green said institutions are starting to sell assets, which could increase volume. Virtú recently bought properties from global investment and banking giants JP Morgan in Portland and UBS in San Diego. With institutions largely out of the acquisition process, his firm sees opportunities to make buys.

“The institutional sellers, who are selling to meet redemptions in their open-ended funds, aren't finding any buyers other than the high-net-worth, family offices,” Green said. “These buyers are more patient and are willing to make longer-term plays.”

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