End of Year Multi-Family Market
This is a good time to check in on the market activity as the year ends. Rather than give you a bunch of data, which I’ll do in my forecast report later in January, I’ll keep this anecdotal.
- Buyers are actively looking, both owner occupants and investors.
- Munjoy Hill values are completely detached from the rest of the market. Recent 3 unit sales all north of $450,000.
- “Pretty” buildings are commanding a premium and even location can be largely overcome by quality and presentation.
- On the other hand, properties that are a little tired, don’t show well, or have some deferred maintenance, struggle to find buyers even when the price appears to account for the deficiencies.
- Commercial sized multis (5+ units) have increased in value as in and out of state investors accept lower cap rates (which equals higher prices).
- One out of state investor paid roughly $100/unit for several B/C class properties. While values are increasing, these sales are not strictly reflective of the wider market and appraisers are trying to figure out how to incorporate these sales.
Rising rents and projections for continued strength in the rental market has spurned the first round of new market rate development in Southern Maine for many years. Below are few of the projects currently underway or planned.
- West End Place – 39 Luxury Apartments is nearly complete
- East Bayside – Redfern is beginning plans for 56 units in the location of the current 3G’s Auto
- Midtown – It was recently announced that this project is being scaled back as a compromise with opposition groups. The entire structure is now planned to be built in one phase.
- Cascade Falls is a new development of 60 – 96 market rate apartments. Rents are project around $1,400++ for 2 bd units.
Brit Vitalius is the owner of Vitalius Real Estate Group and President of Southern Maine Landlord Association. He can be contacted at: 306 Congress St, Suite 3, Portland, ME 04101, 541-3755, firstname.lastname@example.org.