Real Estate Journal — Brokerage Directory — July 27 - August 9, 2018 — 5C


M id A tlantic

B rokerage D irectory

Marcus & Millichap Multifamily Research Market Report Healthy economy draws developers and investors into the Washington, DC, Metro area P

ositive economic driv- ers prompt further construction. Since the great recession, Washington D.C.’s minimum qualifying income for the metro’s me- dian-priced home increased 29%, about twice the growth rate of the market’s median household income in general. The gap between an average rental payment and an aver- age mortgage payment has also widened. As homeown- ership costs continue to rise faster than household income, rental demand will continue. To address demand, develop- ers are adding more options, especially within the District. Deliveries will exceed 1,000 units each in Central D.C., Northeast D.C. and Navy Yard/Capital South. Vacancy fluctuates but re- mains low as concessions fall. Washington, D.C., has averaged 13,300 completions a year since 2013, well above the 6,500-unit annual average from the previous four years. Though demand remains heightened, the continued period of active development will lift the vacancy rate this year as units lease-up. This movement is nevertheless a small change in a market with relatively stable multifam- ily performance that has sus- tained through a large number of deliveries. This is evidenced by the drop in the number of units offering concessions in each class type since March 2017. Investment Trends Over the past year, class B assets exhibited the highest rate of price-per-unit growth. In the past four years, these assets traded more frequently in northern Virginia than in Maryland or D.C. Many inves- tors target class B buildings that can be easily renovated and offer lightly amenitized space appealing to renters who are priced out of Class A units or appreciate the comparative value. • Over the past 12 months, the most trades of any sub- market occurred in Anacostia, as sales volume improved 88% year over year in March. Vacancy declined 180 basis points during the same time period, as existing assets face less competition from develop- ers than in other parts of the District. • Deal velocity for Class A properties reached a five-year

sales velocity improved 7%. Inside the District, the same metric rose 17%, where strong economic drivers promote con- sistent rental demand. • Sales prices marketwide have stabilized over the previ- ous two years, although price appreciation continued at the submarket level, particularly for Capitol Hill and Arlington County. Outlook: Many investors find northern Virginia and Maryland appealing, given amenable tenant laws and strong price appreciation over the past five years. 

high in northern Virginia, with multiple trades around Alexandria and Falls Church. The average cap rate for these

assets are in the high-4% range with an average price of $300,000 a unit. Transac t i on Ve l oc i t y

Quickens as Improvements in Sales Price Become more Localized • Over the past 12 months,


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