Investors upbeat on multifamily properties; TPG in talks for CAPREIT unit

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Investor preference for the multifamily sector grew year over year in 2024, according to a survey conducted by CBRE among real estate investors in the Americas.

Multifamily was favored by 44% of survey respondents in the Americas, the highest among the sectors. By contrast, multifamily properties were preferred by 37% of the respondents in the 2023 survey.

Markets in the US Sun Belt were again the most highly favored areas by investors in the Americas. The Dallas-Fort Worth market was preferred by 40% of the respondents, higher than 36% a year ago. Nashville, Tenn., and Raleigh-Durham, NC, tied in the second place with 21%.

While investor preference for the Sun Belt region continues to be high, challenges in the multifamily sector persist.

Publicly traded apartment owners said at a recent Citi real estate conference that the growing apartment supply in the warm-weather markets, alongside the persistently elevated interest rates, will drag on rents in the region.

Almost 60% of the respondents in the CBRE survey expect to see small or no price discounts for multifamily properties in 2024, up slightly year over year. Meanwhile, 34% expect mid-to-large discounts, down from 44% in 2023.

CHART OF THE WEEK: 65 US REITs report earnings beats

⮞ Sixty-five US equity real estate investment trusts reported earnings that surpassed their funds from operations per share estimates for the last quarter of 2023.

⮞ Howard Hughes Holdings Inc. reported the largest fourth-quarter earnings beat among REITs considered in the analysis.

⮞ The biggest miss was Global Net Lease with core FFO of 21 cents per share, 41.7% below the 36-cent-per-share consensus estimate.

Potential deals

– Canadian Apartment Properties Real Estate Investment Trust is in negotiations to sell its manufactured housing division to alternative asset manager TPG Inc. for over C$700 million, Bloomberg News reported, citing a person familiar with the matter.

– Ceruzzi Properties Inc. and Park7 are looking for buyers for a portfolio of six student housing communities totaling 4,423 beds in Louisiana, Maine, South Carolina and Texas, Green Street's Real Estate alert reported. The properties have an estimated value of roughly $500 million.

US hotel performance

US hotel performance across three key metrics was down in the week ended March 16, STR reported, citing data from CoStar, which provides information and analytics on property markets.

Occupancy closed at 66.5%, falling 1.4% from the comparable week in 2023. Average daily rate (ADR) was 2.1% lower year over year at $163.21 and revenue per available room (RevPAR) was 3.5% lower at $108.51.

Among the top 25 markets, Seattle had the largest year-over-year improvement in occupancy and RevPAR. Anaheim, Calif., posted the biggest ADR jump.

See key people moves in North American real estate.

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