Dallas & Atlanta Dominate Apartment Sales Despite Over 50% Transaction Decline

Dallas and Atlanta maintained their positions as the top markets for apartment sales in 2023, according to a report by MSCI Real Assets. Despite their continued dominance, both cities experienced more than a 50% decline in transactions compared to previous years, reflective of a national trend where sales dropped by 61% to $119 billion.

Shifts in Market Dynamics
Chicago and New York City emerged as significant players in apartment sales, entering the top five markets for sales in 2023 with substantial transaction volumes. Meanwhile, Orlando and Charlotte fell out of the top 10 due to significant declines in sales volume.

Impact of Portfolio Deals
Portfolio deals played a significant role in driving transaction volume, particularly in New York City, where they constituted a substantial portion of the market activity.

Drivers of Market Activity in New York City
Erik Yankelovich from Atlas Realty Group Partners anticipates an increase in sales in New York City driven by distress, particularly due to loan maturities prompting investors to make selling decisions.

San Francisco's Market Dynamics
San Francisco reappeared on the top market list for the first time since 2019, with a notable transaction by Carmel Partners. Despite this, some observers believe the downtown sales market has stalled in the city.

Challenges and Observations
Mark J. Parrell, CEO of Equity Residential, highlighted challenges in San Francisco's market, noting a disconnect between falling rents and rising incomes, suggesting a nuanced situation in urban centers.

Overall, the apartment sales market in 2023 saw significant shifts in top markets, driven by portfolio deals and impacted by various economic factors such as distress and changing urban dynamics.