Sales of apartments posted a relatively strong finish in Q4, but 2009 was still absolutely the worst on record for investment sales. A total of $14.1 billion of significant apartment properties changed hands, excluding foreclosures and other non-market transfers. Apartment sales dollar volume fell 63 percent from 2008 and 57 percent by number of properties sold.
A year ago, the market was anticipating a huge wave of distressed assets to hit in 2009, but only recently have distressed-asset sales become meaningful in the market. Distressed sales in Q4 2009 accounted for 20 percent of all apartment sales by dollar volume. However, based on number of properties sold, the percentage of distressed sales is much greater, over 30 percent in Q4, nearly twice the average for all property types.
The increase in distressed sales is one factor behind the overall increase in transaction volume in Q4. Another factor is that larger properties are starting to trade again. Both deal size and the number of properties sold are rising. The $5 billion of significant apartment sales in Q4 was not only the highest of the year, but also exceeded volume in Q4 2008, the first year-over-year increase in almost two years.
Source: Real Capital Analytics