Last year, multifamily transactions at the national level hit the brakes. Yardi Matrix data shows overall investment volume dropped by 38.2 percent from 2019 to 2020. However, at the regional level, there was significant variance. Some parts of the country, like the Pacific Northwest, saw sales volumes plummet by more than 60 percent, while others ended the year with milder declines.
Spanning the Carolinas through Georgia, the Southeast region has come out relatively unscathed. Although transaction volume dropped 16.6 percent to $15.3 billion in 2020, the region led the country in multifamily investment activity, tied to strong population growth and low costs of living. Investor focus within the region was fairly concentrated: Yardi Matrix data shows that 82 percent of transaction volume occurred in only five markets, highlighted in the table below.
|Rank||Market||Transaction Volume ($MM)||Units Sold|
Source: Yardi Matrix
5. Savannah–Hilton Head
The Georgia and South Carolina coastal market has garnered investor interest in recent years, with transaction volume growing annually by an average of nearly 45 percent during the past five years. In 2020, 25 communities changed hands for upwards of $710 million, a 41.8 percent increase from 2019. Transactions involving Lifestyle assets accounted for more than two-thirds of volume.
In the market’s largest transaction, Passco Cos. paid $78 million for the 300-unit One Hampton Lake in September. The seller, Southeastern, had developed the property, opening its doors in 2018. KeyBank provided the buyer with $50.7 million in Fannie Mae acquisition financing for the purchase. The loan has a 2.75 percent interest rate and matures in 2030.
Triad’s multifamily market performed well in 2020, with rents increasing by 7 percent year-over-year through January while investment volume spiked to more than $1 billion, a 70 percent increase from the approximately $600 million in deals closed in 2019. More than one-third of transactions involved communities in the suburban Deep River–Idle Acres and Woodland Hills–Laurel Run submarkets.
Elite Street Capital’s $57 million February disposition of the 616-unit Lakes at Lincoln was the market’s largest sale in 2020. The buyer, a joint venture between CLK Properties, Houlihan-Parnes and The Morgan Group, financed the acquisition with a $54.5 million loan from Voya Financial. The Class B property, built between 1985 and 1987, had last changed hands in 2015 for $44.1 million.
3. Carolina Triangle
Although investment volume reached $2.1 billion in the wider Raleigh-Durham metro in 2020, this is a considerable drop from the previous year, when nearly $2.8 billion in deals closed. Rent growth has been limited, up 0.3 percent year-over-year through January, moderated by economic conditions and a spate of multifamily deliveries—nearly 5,000 units were added during the year.
The suburban Morrisville submarket had the highest investment volume with nearly $360 million in transactions. The largest sale, however, occurred 4 miles north of downtown Raleigh in Crabtree Valley. In October, LivCor paid $110 million for the 409-unit Park & Market in the market’s largest multifamily deal since mid-2019.
Charlotte takes second place on our list, with a record $3.2 billion in transactions last year. The metro has attracted significant investor interest in recent years: In 2019, slightly more than $3 billion in sales also closed. Investors have continued to target higher-end communities, which accounted for nearly three-quarters of all volume in 2020.
In one of the market’s largest transactions, TPG Real Estate paid $95.3 million for RUSH, a 332-unit student housing property within a half-mile of the University of North Carolina at Charlotte. The seller, Preferred Apartment Communities, also sold three Texas properties totaling 832 units to TPG as part of the same deal.
As the largest metropolitan area in the Southeast, it’s perhaps unsurprising that Atlanta takes the top spot. Even so, the metro’s $5.5 billion in multifamily deals in 2020 was a step back from its 2019 peak of $7.6 billion. Rent growth clocked in at 3.1 percent year-over-year through January, far surpassing the national decline of 0.2 percent during the same period. Atlanta appears well placed for a rebound, thanks to a rapidly expanding population, attractive price points and an unemployment rate of 5.4 percent in December, a full 130 basis points lower than the national rate.
JRK Property Holdings’ November disposition of the 709-unit Notting Hill was the market’s largest deal of 2020. LivCor bought the 16-building luxury community for $179 million as part of a 13-property nationwide sale. Morgan Stanley financed the portfolio acquisition with a $477 million loan. Notting Hill, located at 350 Perimeter Center N. in Dunwoody, was completed in phases in 1999 and 2002.
Yardi Matrix covers all multifamily properties of 50+ units across 133 markets in the United States. This ranking reflects transactions for properties within that sample group.