REAL ESTATE NEWS

HERE'RE THE SIX PRICIEST APARTMENTS SOLD IN 2023

Published on Tuesday, February 20, 2024

All regions in the US are represented on this list.

 

The overall apartment sales volume in 2023 was down 61% year-over-year. Despite the rising cost of debt and economic uncertainty, six apartment communities changed hands for over $200 million during the year, according to RealPage.

The average price per unit was also down, registering at $204,216 in 2023, off 13% year-over-year. Apartment cap rates during 2023 remained the lowest among major property types.

This group represented every region of the country. All told, more than 5,400 apartment properties changed hands at a value of $119 billion during 2023, according to data from MSCI Real Capital Analytics.

This activity was well below the record-setting sales that averaged $332 billion per year in 2021 and 2022 when a total of about 25,000 properties changed hands as the result of pent-up demand following the onset of the pandemic.

It also was well below the $169 billion annual average logged during the five years leading up to the pandemic (2015-2019).

While that was the lowest level since 2020, it was well above the per-unit pricing from 2015 to 2019 which averaged $151,000. Meanwhile, cap rates for apartment transactions in 2023 were up 60 basis points (bps) year-over-year, averaging 5.3%. That was the highest cap rate in four years.

The largest single-asset apartment transaction during 2023 was the sale of Solow Tower Apartments in New York. In April, Manhattan-based real estate investor Black Spruce Management acquired a 45-story residential tower in Manhattanís Upper East Side for $403 million or roughly $1.25 million per unit.

Denver-based Apartment Income REIT Corp. (AIR Communities) purchased the 495-unit Southgate Towers apartment community In January in Miami from Virginia-based Gumenick Properties for approximately $241 million. It was the second-largest single-asset apartment transaction during 2023, going for around $487,900 per unit.

Washington, DC, was home to the third-largest transaction. At the end of August, Carr Properties sold The Elm on Wisconsin Avenue in Bethesda, Md., to Denver-based Apartment Income REIT Corp. (AIR Communities) for $220 million or roughly $515,600 per unit. Itís a two-tower community with 456 units.

Irvine, CA-based Advanced Real Estate in December spent $232 million or roughly $325,000 per unit for the 714-unit community, Camden Martinique, in Anaheim. The four-story development off Pinecreek Drive in Costa Mesa was built in 1986. Advanced Real Estate plans to invest $45 million to remodel it.

In August, a joint venture between California-based Ares Management and locally based F&F Realty sold a 45-story apartment tower in Chicago to Pontegadea, a Spain-based real estate company. It traded for nearly $232 million or roughly $471,000 per unit for the 492-unit property. It is Chicagoís tallest building west of the Kennedy Expressway.

Property Reserve Inc. of Salt Lake City acquired the 300-unit Palisade apartment community in early December for $203 million. Built in 2019, the 23-story building on Lombard Place in San Diegoís La Jolla/University City submarket contains 300 apartment homes. The deal comes to nearly $677,000 per unit.