NORMAN — University Falls Apartments change hands
The multifamily market finished strong in 2012. Locally, several notable apartment sales were recorded, including University Falls Apartments in a a core historical area of Norman.
While many are enthusiastic about the upswing in multifamily housing construction, local apartment broker Mike Buhl, in his 2012 Apartment Report, expresses concern that overbuilding, spurred by low interest rates rather than high market demand, could create a volatile market in some sectors of Oklahoma multifamily housing.
“Money is cheap,” Buhl said. “Is build-out market driven or is it due to low interest rates? Time is going to tell us what the true answer is. I tend to think some of it is low interest rates.”
Buhl said that non-traded, or non-listed, Real Estate Investment Trusts were “very active in Oklahoma in 2012” and that could continue in 2013.
“At first glance this is positive, but could this buying trend also lead to greater volatility for propertietor submarkets?” Buhl said.
Buhl targets Moore, which is experiencing heavy growth, as a potentially volatile area during 2013. He predicts that “lender-owned properties are diminishing.”
“Opportunistic buyers looking for deep discounts in 2013 will be disappointed,” he said.
“A host of new data shows a surge in development activity in the multifamily sector. I estimate that new construction could see another 3,000-plus units in the Oklahoma City Metro that are leasing, under construction or planned in 2013,” Buhl said. “And it appears that apartment developers aren’t going to slow down anytime soon. It’s easy to see why multifamily construction is booming — vacancy rates are falling and rents are on the rise, making investments in multifamily particularly attractive.
“Despite the optimism though, there is concern of overbuilding,” he said in his annual analysis. “Also of concern is that the majority of new apartment units being delivered today fall in the luxury category and there are only so many people that can afford them.”