Small Multifamily Investment Snapshot — Q3 2021
In Q3 2021, small multifamily assets continued to retain the stability that has become the hallmark for the sector. According to the Arbor and Chandan Economics Q3 2021 Small Multifamily Investment Trends Report, origination volume on loans with original balances between $1 million and $7.5 million — including loans for apartment building sales and refinancing — were on pace to finish the year at $59.4 billion. This would represent an increase of 3.4% over last year’s total and surpass 2019’s record high of $59.2 billion.
Small multifamily valuations increased 2.3% during the quarter, and 2.9% year-over-year. Valuations are also up a healthy 12.2% from their recession low and 7.7% higher than before the onset of the pandemic.
Cap rates have sat in a narrow range over the last two years and remained essentially flat during the third quarter, rising 3 basis points to 5.2%.
Here’s a quick look at the rest if the Q3 2021 small multifamily investment benchmarks.