Scribd
Upload
146 views

Multifamily+Investment+Report v3

The Baltimore City multifamily market saw its slowest sales quarter in history in 2023 Q1, with just $35 million transacted due to high interest rates. While fundamentals remain healthy with low unemployment, inflation and rising costs are posing challenges. Notable recent transactions included a 96-unit property that sold for $8.8 million. Economic conditions in Baltimore remain positive despite macroeconomic headwinds from high inflation and interest rates nationally.

Uploaded by

Kevin Parker
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
146 views

Multifamily+Investment+Report v3

The Baltimore City multifamily market saw its slowest sales quarter in history in 2023 Q1, with just $35 million transacted due to high interest rates. While fundamentals remain healthy with low unemployment, inflation and rising costs are posing challenges. Notable recent transactions included a 96-unit property that sold for $8.8 million. Economic conditions in Baltimore remain positive despite macroeconomic headwinds from high inflation and interest rates nationally.

Uploaded by

Kevin Parker
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 8

Baltimore City

Multifamily
Investment
Report
JUNE 2023
OVERVIEW
Investors have pulled back and maintained the benchmark
in 2023, resulting in one of interest rate after ten consecutive

$46.8M
the slowest sales quarters in increases. This occurred after
Baltimore City’s multifamily the May inflation data showed a
market’s history. More than $35 4% increase year-over-year, the
million was transacted in 2023 Q1, smallest increase since early 2021. 2023 YTD Sales
which was about 80% less than Volume
the quarterly average for the past Inflation continues to
three years. High interest rates pose challenges for the
have challenged deal closings property insurance market,
as lenders have tightened their as replacement costs have
borrowing standards and bulked skyrocketed due to the increase
up their reserves. This economic
climate has caused continued
uncertainty within the capital
in the price of labor and
materials. This has led to further
difficulty in underwriting and has
3.8%
10-Year Treasury
markets. delayed deals getting done.
Rate (as of June)
Property expenses have Overall, multifamily
increased recently, mainly due to fundamentals remain healthy
insurance prices and the rising despite a slight increase in
cost of labor and materials. To vacancies, and Baltimore’s
combat historical inflation, the economy continues to add

1.3%
Federal Reserve raised rates jobs. Rent growth has slowed
for the 10th time in a little over due to the increased availability
a year in early May, pushing of apartments. But the state
the fed funds rate to a target unemployment rate hit its lowest Job Growth (YoY)
range of 5%-5.25%. However, level recorded since 1976 at
there is a short-term relief as 2.7%, which should help provide
the Fed paused rate increases further demand for multifamily.
for the first time in 15 months
Baltimore City Multifamily Investment Report 2023
NOTABLE RECENT TRANSACTIONS

FORREST STREET GWYNNS FALLS


ASTOR COURT HAMPTON COURT
APARTMENTS GARDENS

1100 Orleans St 2440-2442 St. Paul St 307-311 Dolphin St 3415 Gwynns Falls Pky
96 Units | May 2023 36 Units | Feb 2023 29 Units | Jun 2023 34 Units | Feb 2023
$8,800,000 | $91,667/Unit $4,976,000 | $138,228/Unit $3,325,000 | $114,655/Unit $2,587,341 | $76,392/Unit

2311-2315 FREDERICK MANOR


FOREST HILL 814 PARK AVE
WHITTIER AVE APARTMENTS

2311-2315 Whittier Ave 4907-4921 Frederick Ave 3631 Liberty Heights Ave 814 Park Ave
28 Units | Feb 2023 32 Units | Feb 2023 30 Units | Jan 2023 11 Units | Mar 2023
$2,380,000 | $85,000/Unit $1,790,000 | $55,938/Unit $1,650,000 | $55,000/Unit $1,500,000 | $136,364/Unit

= Harbor Stone Advisors Representative Transactions


Baltimore City Multifamily Investment Report 2023
Baltimore City Multifamily Investment Report 2023
CAP RATES
Cap rates have begun to increase in
recent quarters and “appear to be
reflecting past market conditions that
have changed significantly over recent
months,” according to the Mortgage
Bankers Association (MBA). The MBA’s
forecast for the near term includes a
slight expansion as the market adjusts
to the Federal Reserve’s stringent
monetary policy. According to CoStar
data, the Baltimore MSA market cap rates
show similar movement in the coming
quarters. And the 10-year treasury has
continued to push higher due to the
changing economic conditions. The
spread between cap and treasury rates
continues to tighten.

3.8%
10-Year Treasury
Rate

Baltimore City Multifamily Investment Report 2023


ECONOMIC CONDITIONS
BALTIMORE METRO
Baltimore’s economy has steadily added jobs in
recent months, and the metro area’s unemployment’s
rate is near all-time lows at 2.3%. In the past 12
months, Baltimore has added more than 18,000 jobs,
with the leisure & hospitality, construction, education
and health services, and trade, transportation, &
utilities sectors leading the way.

The area benefits from its central location in the


Mid-Atlantic region with easy access by highways,
port, rail, and air travel. The port of Baltimore drives
industrial activity, and the rise of ecommerce has
led to prominent firms like Amazon, Under Armour,
Home Depot and many others adding jobs in
Baltimore recently.

2.3%
Unemployment Rate

1.3%
Job Growth (YoY)

Baltimore City Multifamily Investment Report 2023


U.S. MACROECONOMIC
CHALLENGES
The Federal Reserve paused rate hikes for
the first time in 15 months at the Central
Bank’s June meeting after ten consecutive
increases. This comes after the U.S. Bureau of
Labor Statistics May release of the Consumer
Price Index of a 4% increase year-over-year,
the smallest rise since the beginning of 2021.
Though the Fed committee suggested, there
would likely be further hikes. Many small and
regional banks have tightened loan standards
due to the stringent monetary policy, which led
to the recent bank failures of Silicon Valley Bank
(SVB), Signature Bank, and Silvergate Bank.
Uncertainty within the capital markets persists
due to these factors.

4.0%
Consumer Price
Index (YoY)

5.0 - 5.25%
Fed Funds Rate
(Current Target Rate)

Baltimore City Multifamily Investment Report 2023


WWW.HARBORSTONEADVISORS.COM

INVESTMENT SALES SUPPORT


SALES SERVICES
JUSTIN VERNER SHANA CALLAHAN
President Senior Analyst
410.960.3962
[email protected] TODD GALVIN
Senior Operations Analyst
BROOKS HEALY
Director EMILY ANNESS
443.523.6865 Senior Marketing Specialist
[email protected]
JENNIFER SUPLEE
TOM WOHLGEMUTH Senior Marketing &
Senior Advisor Design Coordinator
240.444.4656
[email protected]

You might also like