Multifamily

By Pat Swanson, Executive Vice President, Colliers Orange County Lack of supply remains most evident in the Orange County multifamily market, with vacancies trending near historic lows at 2.3 percent. As supply dwindles, we have seen the pressure felt by investors to ramp up and hunt for the elusive value-add opportunities in this marketplace. Many profit hunters actively seek properties with upside in rent, accessory dwelling unit (ADU) potential and inadequacies as part of the existing management.  A recent example is a 12-unit, single-story Garden Grove asset on a large parcel of land that was purchased below replacement cost. The Florida-based seller operated and managed the building remotely and desired to move his assets closer to home. Due to the long-distance operations, the local buyer felt they could control the property more efficiently by adding improvements to generate higher rents, while also taking advantage of the open spaces that could accommodate additional ADU units. This was a perfect fit for both parties, and we were able to execute the deal. It shows the type of value-add complex that has become highly sought after. Like the investors who flocked to Garden Grove, similar buyers have reevaluated their wants for quality Class A …