Thursday, December 1

Small Multifamily Buildings Increasing in Value, Study Says

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Small multifamily buildings are increasing in value, according to a new study.

Arbor Realty Trust said small multifamily buildings often are reaching new highs, according to a new system it developed to measure appreciation of these properties.

The Uniondale-based real estate investment trust said it worked with Chandan Economics, a provider of data and analytics to commercial real estate lenders, investors and policymakers, to evaluate appreciation and pinpoint trends. They developed the Arbor Small Multifamily Price Index to evaluate values of these properties.

The company said small multifamily prices, as measured by the newly created system, are up 1.3 percent from the first quarter of 2019 and 6.9 percent from second-quarter 2018.

Since their post-recession low in 2010, the value of small multifamily property prices have increased by more than 78 percent and are 36 percent above their previous high, according to the company.

The system is designed to measure the estimated average price appreciation on small multifamily properties with five to 50 units and with primary mortgages between $1 million and $7.5 million.

Arbor CEO Ivan Kaufman said the “Arbor Small Multifamily Price Index is a new and important tool that will allow investors to distinguish how properties in the small multifamily market are trending in comparison with other subsets of the real estate market.”

Sam Chandan, founder of Chandan Economics. said small multifamily properties make up about 32 percent of total U.S. rental inventory.

“This sector is becoming increasingly important to our nation’s workforce,” he said. “And we are pleased to work with Arbor to provider meaningful research and insight into this area.”


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