The Houston multifamily real estate market is seeing unprecedented investment activity as investors flock to secure a stake in the city’s lucrative rental market. According to Chris Curry, Senior Managing Director at Berkadia’s Houston office, the office closed 183 multifamily sales in 2022 for an impressive cumulative deal volume of $5.6 billion – a record for the office.
The reasons for this exceptional activity are twofold. On one hand, investor appetite is strong for Houston-based multifamily products due to the fact that rent growth projections remain favorable for the next few years. On the other hand, an unfavorable seller’s market combined with a dramatic slowdown in new construction developments has caused buyer demand to surpass the available supply.
This dynamic has driven up property values and made it more difficult to find available opportunities – but savvy buyers know how to navigate these challenges and still come away with quality investments that offer a good return on their investment. They tend to focus on properties in sought-after locations within walking distance of amenities like grocery stores, restaurants, and entertainment venues; they also pay attention to factors such as local school districts and recreational offerings when researching potential investments.
The high levels of interest in Houston’s multifamily real estate market have put sellers in an enviable position – they can be more selective when it comes to choosing buyers and can negotiate favorable terms on deals. But buyers should not be discouraged by this; with careful research and strategy, there are still quality investments available if you know where to look. Whether you’re looking for Class A or B/C products or single-family rentals or value-add opportunities, now may be the perfect time to take advantage of all that the Houston market has to offer!
Z-Co is delivering a multifamily project called The Everson Luxury Apartments in 3rd quarter of this year.