Apartment sales prices aren't on rockets like the past few years, but they're still sky high — and the sky is higher than it used to be.
That's one way to read the midyear multifamily report from Norman-based Commercial Realty Resources Co.: Demand from investors, mostly from out of state, is keeping prices strong.
The first half of 2013 marked the $38.2-million purchase of 294-unit Deep Deuce Apartments downtown and the $25.2-million acquisition of Watermark at Quail North, near NW 150 and May Avenue, both by Steadfast Income REIT Inc. of Irvine, Calif., Commercial Realty Resources Co. noted.
Charleston, S.C.-based Greystar Real Estate Partners's more recent $71 million combined acquisition of 396-unit Legacy Crossing, 3131 SW 89, and 328-unit Legacy Woods, 1919 E Second St. in Edmond, fit the trend, said Commercial Realty Resources owner Mike Buhl.
The metro-area multifamily investment market, he said, is seeing sustained high prices because investors just keep coming “and buyers are becoming more comfortable paying these prices because so many other people are paying them.”
It has put developers in the unusual position of being able to build new apartments for less than it would cost to buy comparable properties, he said — and so they are. Buhl said he expected to see continued strong construction of new apartment complexes for the next 12 to 18 months, at least.
“Clearly, supply and demand have reached disproportionate levels. There are simply not enough apartments for sale to satisfy the overabundance of investors searching for deals,” Buhl wrote in the report. “What is happening with a lot of groups that can't get their hands on the property they want at the yield they want, they are turning to development. ... And I think that demonstrates the progression of our markets over the past decade or so: Investors really want to be in Oklahoma.”