Metro Volume and Pricing
Qualifying single-property Boston apartment investment sales picked up in the second quarter of 2012 according to Reis.* The quarter saw just ten deals for $178.5 million at a mean price of $193,819 per unit. The dollar value total for the first half of 2012 is similar to that of 2011, and the total transaction volume for the 2011 year was nearly $800 million at a mean price of $216,400 per unit. In the second quarter’s leading sale, Berkshire Property Advisors bought the 394-unit Highpoint Apartments in Quincy from Highpoint Apartments LLC for $88 million ($223,350 per unit). The deal was completed in June. In May, Behringer Harvard bought the 240-unit Alexan Pembroke Woods in Pembroke from TCR Pembroke Woods Holdings LP for $42.25 million ($176,042 per unit).
The Central City/Back Bay submarket holds the top spot for the dollar value of sales over the past four quarters at $236 million and has the highest mean price at $455,631 per unit. Far more units sold in the West/NW suburban submarket, however, where the mean price was just $131,596 per unit.
Cap Rate Comparisons and Forecasts
With some variation, Boston’s mean cap rate has tended to be lower than the U.S. and Northeast region averages. The mean cap rate for second quarter sales was low at 5.0%. While quarterly means have been higher or lower, the rolling 12 month mean has been steady at about 5.0% for four quarters. It is expected to continue to stay within 30 basis points of that level going forward.