Portfolio sales drive active Victoria multifamily market
Rising interest rates, low inventory set to cool deal activity
Starlight Group was the most active buyer of Victoria multifamily properties in the first half of 2022, keeping activity on par with 2021 despite a pending shortage of product. Of the 26 properties that changed hands in the period according to data gathered by CBRE Ltd., 14 were picked up by Starlight through the acquisition of three different portfolios. The largest was the 13-property Raamco International Properties Canadian Ltd. portfolio, which included eight properties in the Victoria area. The deal included 1,027 units in the market, or more than half the 2,012 units that changed hands in the period. All told, the sales contributed to $663.8 million in transactions in the first half of the year – just $100 million shy of $756.6 million in transactions in all of 2021. Portfolio sales also supported the Nanaimo market, where three of the seven properties that changed hands were part of a single deal. The value of transactions in Nanaimo during the period totaled $75.9 million with per-unit pricing on par with 2020 at $259,181.But the high volume of activity isn’t likely to continue into the second half of the year. “Overall these all occurred prior to our current real estate environment,” said Sim Waraich, a senior financial analyst with CBRE who prepared the report. While institutional buyers are still interested in the market, thanks to strong fundamentals including low vacancies and a limit supply of units, the cost of financing has made many buyers hold off, at least temporarily. Sellers are also reticent to list given the downward pressure on prices in the current market.