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Multifamily Transactions Still Light Through the Third Quarter of 2018 in Downtown D.C.

CoStar Market Insights: Downtown D.C. Investment Market Shows No Signs of Picking Up
September 11, 2018

The 113-unit apartment building at 2144 California St. NW in Washington, D.C.



Downtown D.C. sales volume is down relative to the previous few years, but that is mostly because of the record levels set in the early years in the cycle. Compared to history, the past 12 months have posted average volume. Meanwhile, pricing continues to soar.

See CoStar COMP #4209800.

The only property to trade this year was a deal between Bedrock Real Estate and Pacolet Milliken Enterprises. The property at 2144 California St. NW was mostly vacant at the time of the sale, but still sold for about $17.6 million, or about $156,000 per unit. The 113-unit property is undergoing renovations, and when complete in 2019, should boast completely reconfigured apartments.

Cap rates remain tight, and at sub 4 percent, are one of the tightest rates in the metropolitan area. Investors paying for an asset in the heart of D.C.’s urban living are paying a premium for that opportunity.



Cap rates below 4 percent are only found in other similarly high barrier-to-entry submarkets such as H Street/NoMa, Southwest/Navy Yard, McLean/Great Falls and Rosslyn. Pricing should remain elevated, especially because of the influx of new, institutional grade assets that could attract both national and global investors who are willing to pay for location.


CoStar Market Insights provides a snapshot of recent real estate trends. The CoStar Market Analytics team monitors commercial and multifamily real estate across 390 metro areas, with a granular understanding of the projects, players and economic trends that move these markets.

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