Texas

By Jack Stone, senior director of investments, Greysteel It seems like every month there’s a new sales record being broken in the El Paso multifamily market. But with interest rates officially rising, how long will that streak last? El Paso has been on a tear. Greysteel has sold roughly 4,000 units there in the past 36 months. That’s an impressive number, but it’s not a surprising one. Between 2012 and 2014, roughly 20 properties over 25 units traded in El Paso. That number skyrocketed to 69 properties between 2019 and 2021. But why? We’ve followed the El Paso market closely and have brought numerous first-time, out-of-state buyers to the market. The No. 1 reason they’re interested in El Paso is the competitiveness of other markets like Dallas and Austin, where cap rates have just compressed too much. With lower cap rates and cash-on-cash returns, investors started flocking to secondary markets where they can achieve higher yields. But El Paso, while a secondary market, has several factors that help it stand out from the rest: (1) it’s one of the top 20 largest cities in the country, which comes as a surprise to many; (2) it’s well-diversified, having weathered the recession …