Each investment property is as unique as a fingerprint. Income, unit mix, utility metering, renovations, deferred maintenance, location, age, efficiency, aesthetics, amenity assets and timing are just a few of the dimensions that come together to determine value! These are just some of the characteristics one must consider when assessing a multifamily property. Experience tells us that one must peel away the layers when looking at “similar” properties. Just like judging a vintage baseball card or a beauty contestant, we must bracket the differences and similarities in each property, placing them in an order that is usually supported by recent sales. Once comparable sales determine the value, we then begin to see where the property would be considered a competitive and compelling choice, based on the value within the field of other properties on the market. It’s very easy for a seller to have high expectations and listing prices based on similar overpriced properties currently on the market. The harder but more beneficial conversation we have with our sellers involves what their property offers and how that fits in the current market, based on recent sales.
Comparable properties are never a mirror image of each other. To use the most common formula (a per unit value) is like saying all 25-year-old men are in excellent health, which we know is untrue. While using a price per unit value is a good starting point, one must evaluate income and expenses and have an understanding of the secondary value indicators such as location dynamics and rental upside potential. Third level benefits to assess and consider would include demographic shift and neighborhood transitions and future development credits. Are the improvements helping the value or causing buyers to be reluctant to assume someone else’s idea of renovations? (This phenomenon is called functional obsoleteness.) If we could only see things through the eye of the buyer, rather than the emotional view of a seller, value would be much easier to determine.
With a total transaction volume of over $1,000,000,000 in consideration, we have had the opportunity and honor to list and sell some of the very finest multifamily properties in the market. It’s this expertise and understanding that affords us a significant advantage and access to a larger sample of the multifamily real estate market. We have invested heavily in an extensive marketing platform throughout our 700 offices that not only has tremendous regional exposure but also provides access on a national and international basis, unlike any other multifamily real estate brokerage. We have been tracking relevant sales and the market direction for decades. We are continually looking to the future, anticipating an ever-changing market and drawing from experience, with a focus on delivering results. Whether it is the sale of your grandmothers apartment building or the acquisition of a legacy property for the family, we have the decades of experience to make it the best possible experience.