Page 16 - 2019 Colliers Forecast Book
P. 16

16   Colliers International | West Michigan








                                            The Waters House Apartments













                                                                   The market has been quite active in
                                                                   2018, with more than 1,500 units
                                                                   completed throughout the year and

                                                                   more than 2,500 units planned or

                                                                   currently under construction.







                                                                   GRAND RAPIDS



                                                                   MULTI-FAMILY





          Limited product seemed to be the main theme in 2018, leading  We will likely see the conditions of 2018 recur in 2019.
          to increased competition with deals that were available. It has  Pricing may temper off a bit, however, buyer demand will
          been a seller’s market as there have been far more interested  persist as companies from the coast and major metros chase
          buyers than sellers, allowing sellers to keep pricing and terms  higher yields in markets such as West Michigan, relative to
          fi rmly in their favor. Multi-family units in Grand Rapids recorded  their own backyards.
          a rolling 12-month average sale price of $69,430 per unit as
          of November 2018. Just 12 months prior, the average was  Between this year and last, apartment sales made up one-third
          $95,405 per unit, though this number was bolstered by the  of all investment sales in West Michigan aggregating $141
          outlier of The Ridges of Cascade transaction. Without that  million in sales volume reported from Real Capital Analytics.
          outlier in the data set, the average price per unit in 2017 was  There have been a number of prominent multi-family investment
          $61,585.                                             sales in the region this past year. One of the largest transactions
                                                               in West Michigan was that of the combined purchase of
          The average interest rate for recorded transactions in West  Ramblewood Apartments and Woodlake Apartments for $144
          Michigan was 4.63 percent in fourth quarter 2018 –  million by New York-based Torchlight Investors. Additionally,
          compared to 4.09 percent just a year prior – a 13 percent  Waters House Apartments at 500 Fulton Street E in Grand
          increase. Interest rates are relatively low compared to historical  Rapids was closed by Colliers’ very own Matt Jones, Associate
          rates, but they have been showing a gradual upward trend in  Vice President of Multi-Family Investments. This property sold for
          our local market these last fi ve years. These rising interest rates  $10.25-million and consists of 107 apartment units, common
          have an impact on home affordability, which can be benefi cial  areas, a pool, and 125 parking spaces on-site.
          to apartment demand.  As the cost of borrowing goes up,  On the development front, just south of Waters House
          prospective single-family home buyers can afford less, so  Apartments is the site of the newly completed Heritage
          may elect to remain renters for longer.              Place at 50 College Avenue SE. This $14-million four-story
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