US multifamily homes, offices find favour among private equity investors
Last year, the supply of multifamily homes in the country grew by the most since the 1980s, although “exceptional” demand has helped to absorb that, says a Freddie Mac report
THE multifamily sector in the US is fast catching the attention of private equity investors, including those from Asia, such as South Korea’s Samsung SRA Asset Management.
One of the largest commercial real estate market components in the US, multifamily housing is also one of the most levered, with properties having high loan-to-value ratios. Rising migration and housing costs have boosted the appeal of such dwellings, propelling their valuations to record highs in 2021 and 2022.
Last year, the supply of multifamily homes grew by the most since the 1980s, although “exceptional” demand has helped to absorb that, according to a Jan 8 report by Freddie Mac, the US government agency tasked to support the housing finance system. Despite modest growth in 2024, the agency predicts rents in the sector to rise 2.2 per cent this year, which is 60 basis points below the average between 2000 and 2023.
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