If you’re looking for multi-family property that can serve as a source of income, commercial property investment, or addition to your real estate portfolio, Cardinal Realty Group would be happy to assist you.
Choosing a Multi-Family Property
Multi-family properties, also known as multi-family residential or multi-dwelling units, are developments that contain multiple separate residences for two families or more. Some examples are apartment buildings, duplexes, and triplexes.
There are four types:
Class A apartments are premier multi-family properties that are brand new and rent for above the average rate. The majority of institutional investors, such as pension funds and insurance companies, purchase Class A apartments.
Class B multi-family properties are typically 10 to 20 years old, well-maintained, and are located in middle-class areas. Tenants are usually a mix of white-collar and higher paid blue-collar workers.
Class C apartments are generally 30 to 40 years old and have been rehabilitated at least once. These apartments tend to have moderate- to low-income tenants, as well as tenants on government assistance.
Class D apartments are more than 40 years old.
The multi-family sector is booming across the Midwest, and St. Louis metro is no exception. Low supply and steady demand for housing has shaped the market, and developers are rushing to meet the demand for multi-family apartments in the metro area.
Approximately 4,500 units were delivered in the market over the last three years as declining vacancy rates captured developers’ attention. The majority of deliveries were in the submarkets of St. Louis City and South St. Louis City, and most of the construction that is underway can be found in these locations.
Roughly 3,500 units are under construction. There’s a high concentration of ground-up construction projects in downtown neighborhoods and the Central West End. High profile developments include One Hundred apartment tower, with construction starting in Q1 of 2018. With 36 stories and 316 units, the $130-million-dollar building will be taller than Park East Tower and Chase Park Plaza upon its completion in Q2 of 2020.
Phase two of Ballpark Village is also one of the most highly anticipated projects in the downtown area – the mixed-use project will feature a luxury 29-story high rise building that will being residents close to Busch Stadium.
The project is slated for Q1 2018 and will be completed by 2020. The project is expected to create about 1,500 construction jobs and approximately 1,000 permanent jobs upon its completion.
Redevelopment has also taken over construction in the downtown area – high profile redevelopment projects in 2017 include The Gallery 1014 apartments, which is the result of the conversion of Alverne building, which previously served as a retirement home, as well as the renovation of the Railway Exchange building.
There has been an uptick in investment in the last few years, and nearly $1 billion was traded in the last two years alone. Selling prices have exceeded pre-recession rates and are presently one-third of the national average.
Trading is spread out over various areas, with a focus on the west side of St. Louis and the western suburbs.
The majority of properties that were sold in the last two years were mid- and low-tier assets that are generally seen as value add opportunities.