Misc Commercial /MF Market Data - Price Moving sidewise/downward?

[Shahriar Khan]

Hi Everyone , 

Just wanted to share some data that i found interesting .. These reports are available from RCA Capital Analytics website . 

Context (Looking to buy/syndicate MF properties with retail mgmt in place and at the same time dont want to take on a risk for 5% or 6% CAP rate ...so pulling data to identify pockets.. which may or may not happen) : 

1) Pulled Census data base where we could segment Cities by Population/Growth Rate/Unemployment Rate from 2013-2017. Now adding Poverty/Education etc on top . This is to identify cities potentially we can target for MF (secondary market) based on data. @Omar Khan

2) Overlay Top down Market data on top to figure out pricing/valuation (we follow major publications aka RCA Insights ) 

Whats on the chart:

1) Cap rate for MF (Class A/B aka Lifestyle) is lowest ...indication of competition

2) Pricing trend by year and then within major cities .. indication of possible downturn or isolation of submarket 

3) (dont have it here) MF price index doubled in past 10 Yrs.... indication is that market pulled all operators including both good and bad 

@Ivan barrett 

Hypothesis:

1) There will be opportunities within MF to get a higher cap rate where Operator will need to exit due to operational/Debt performance... most probable case to compete with other existing good operators /indicators 

2) Properties that will pass a stress test valuation with scenario where a downturn will happen aka vacancy will do up  and rent growth isnt possible for a duration of 2-4 yrs.

It takes a bit opposite position to Recent post from 

https://www.biggerpockets.com/forums/432/topics/687483-unprecedented-structural-shift-the-thriving-multifamily-market

And supports 

https://www.biggerpockets.com/forums/432/topics/683154-bullish-on-multifamily