Newport Beach

Highlights:

• Operating conditions cooled during the fourth quarter with rents declining and vacancy inching higher. After a slowdown in apartment deliveries in 2021, developers were more active in 2022 with the completion of roughly 2,370 units for the year. New construction will accelerate again in 2023.
• Local vacancy ticked higher before the end of 2022, rising 10 basis points during the fourth quarter to 3 percent. Despite the minimal increase at the end of the year, the rate still declined 10 basis points in 2022, the second consecutive year where conditions tightened.
• Rent trends were also mixed in 2022. For the full year, asking rents rose 5.1 percent to $1,818 per month. During the fourth quarter, however, rents dipped nearly 2 percent, offsetting some of the year’s earlier gains.
• The multifamily investment market slowed in the final few months of the year even as pricing remained well above the 2021 figure. The median sales price in 2022 was $334,500 per unit, up 26 percent from the median price in 2021. Cap rates averaged around 3.75 percent during the fourth quarter.

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Highlights:

• Multifamily property fundamentals in Orange County softened slightly during the fourth quarter, but the overall outlook remains positive. Apartment developers are actively bringing new projects online and will ramp up deliveries in the coming quarters.
• Local vacancy ticked higher in the final months of 2022 but remains below the long-term trend. Vacancy rose 10 basis points in the fourth quarter to 3.3 percent. For the full year, the rate dipped 10 basis points.
• Local apartment rents trended lower in the fourth quarter, retreating by less than 1 percent to $2,490 per month. Despite the reduction in the fourth quarter, rents still advanced 7 percent in 2022.
• The Orange County multifamily investment market picked up slightly at the close of the year, but total sales activity in 2022 was down significantly from prior year levels. The median sales price during the past 12 months was $369,100 per unit, down slightly from 2021. Cap rates are holding fairly steady with most properties selling with cap rates between 3.75 percent and 4.25 percent.

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Shane Shafer
Managing Director

LOS ANGELES, CALIFORNIA (February 21, 2023) – Orange County remains a highly desirable market for multifamily investors — and for good reason. It is a flight-to-quality market with a strong employment base and continued expectations of future job growth; this drives demand for rental units and pushes rent growth and occupancy.

Add to that a severe shortage of rental housing supply, more would-be homebuyers remaining renters, and Orange County’s affordability compared with other Southern California markets, and it points to a robust investor market.

The employment market continues showing signs of growth and resurgence, adding 73,000 jobs in 2022. Unemployment is an extremely low 2.5 percent. Long known for its tech startups, tourism, and hospitality sectors, healthcare and bioscience are also expanding industries. For example, Washington-based health system Providence is investing $712 million in Orange County to build two new multispecialty medical centers and a new patient-care tower at Providence Mission Hospital. The centers will be in San Clemente and Rancho Mission Viejo.

This strong job market gives multifamily investors’ confidence in their expected returns as they aggressively pursue assets when they hit the market.

Central Orange County leads in rental gains
Central Orange County experienced a spike in demand due to limited new construction and renters seeking affordable rental levels and good-paying jobs. Average rents here are nearly $950 per month lower than the coastal markets and Class A core sector.

This renter migration is creating high demand and driving continued rent growth while maintaining very low vacancy rates in all sectors, but primarily in mid-market vintage properties. Rents in Central Orange County mainly expanded in first-quarter 2022 and eased in the remaining three quarters. Although rent growth slowed, it still remains stronger than most other markets in the county.

Anaheim/Central Orange County led the market with the highest year-over-year rental growth of 6 percent and the lowest vacancy rate at 3.3 percent. Although rent growth is lower than last year’s increases, new leases being signed are still in the upper teens to 20 percent with growth still very positive, and showing continued momentum.

Expensive cost of homeownership
Challenges of affording a home in Orange County continue, pushing more would-be homeowners to rent. The median single-family home price in Orange County is $1,036,000. Assuming a 20 percent down payment at current mortgage rates, monthly payments average $5,632. Newer construction multifamily product, which would compete for these residents, averages $2,992 per month, making renting more affordable than owning. This trend is fueling demand in all areas, particularly in the coastal, and South Orange County markets and Class A core market buildings.

Flight to quality
Multifamily values in Orange County have maintained one of the highest price per unit, and in many cases, the lowest cap rates of any Southern California market. The median sales price in 2022 was $366,400 per unit with several Class A properties trading in excess of $500,000 per unit.

Orange County is typically a lower-volume transaction market. When a multifamily asset becomes available, there is no shortage of investors bidding to take advantage of the consistent, stable returns. The market’s investor appetite for quality locations that produce expected consistent good returns and lack of inventory could allow for competitive pricing levels in 2023.

Read the full story.

Highlights:

• The Los Angeles multifamily market continued to post a healthy performance during the third quarter. Local vacancy tightened again in the last three months while asking rents throughout the county crept higher at a modest rate.
• Local vacancy continued to inch lower in recent months, dipping 10 basis points during the third quarter to 3.5 percent. Year over year, vacancy is down 60 basis points. Vacancy has declined in each of the last five quarters.
• Following steep increases, the pace of rent growth slowed in the last three months. Asking rents rose less than 1 percent during the third quarter to $2,358 per month. Year over year, rents are up nearly 12 percent.
• While the pace of deals slowed in the third quarter, sales prices remain elevated. The median sales price to this point in the year is $330,800 per unit, up 14 percent from the median price in 2021. Cap rates inched higher in recent months, with most properties trading between 4 percent and 4.5 percent during the third quarter.

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Highlights:

• Multifamily property performance metrics were strong in Orange County during the third quarter. Vacancy remained low, and asking rents continued to trend higher. Multifamily developers are expected to increase deliveries in the final months of the year.
• The vacancy rate inched higher in recent months as absorption levels slowed from the previous period. Area vacancy rose 10 basis points during the third quarter to 3.2 percent. Year over year, the rate is down 20 basis points.
• Asking rents continued to push higher in the last three months, rising 1.3 percent during the third quarter to $2,499 per month. Year over year, local apartment rents are up 14.3 percent.
• The local investment market slowed in recent months, as the pace of deals pulled back during the third quarter. The median price in transactions that have closed year to date is $366,400 per unit, slightly lower than in 2021. Cap rates held fairly steady to this point in the year, as most properties are selling with cap rates between 3.5 percent and 4.25 percent.

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Highlights:

• Property performance metrics in the Inland Empire remained strong during the third quarter, although the pace of rent growth cooled.
• The vacancy rate ticked lower during the third quarter, dipping 10 basis points to 2.9 percent. Year over year, vacancy has improved by 30 basis points.
• Asking rents inched higher in the third quarter, reaching $1,854 per month. Despite a minimal increase in the last three months, current rents are up 8.1 percent from one year ago.
• The local investment market strengthened during the third quarter as the pace of deals accelerated, and per-unit pricing remains well above last year’s figure. The median sales price to this point in the year is $335,500 per unit, up more than 25 percent from the median price in 2021.

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Peter Hauser
Senior Vice President

Matt Hauser
Senior Associate

NEWPORT BEACH, CALIFORNIA (October 3, 2022) — Peter Hauser, senior vice president – investment sales , and Matt Hauser, senior associate – investment sales, have joined Northmarq’s Newport Beach office. Peter and Matt will work alongside Shane Shafer to provide expertise on multifamily investment sales brokerage and recapitalization for clients throughout Southern California.

 “I am excited to have Peter and Matt join the dynamic investment sales team in Newport Beach. Their extensive multifamily relationships and proven track record will assist us in further increasing our presence in the marketplace,” said Shafer. “This addition further solidifies our commitment to growth in Southern California. Our team will provide further real estate solutions to private capital and institutional owners in the Southern California multifamily market.”

Peter Hauser spent four years with Berkadia as an associate partner from 2013-2017 where he attained notable sale transactions. He then served five years as principal at Avision Young’s Irving office before joining Northmarq. Peter serves on the board of directors of Mariman Company – a private real estate investor and manager in select California markets which emphasizes on affordability preservation opportunities for individuals, working families, and seniors. Peter graduated from the University of Southern California where he earned a bachelor’s degree in Business Administration.

Matt Hauser served for five years as associate of multifamily markets with Avision Young prior to joining Northmarq. He got his start in commercial real estate as an associate director at Berkadia. Matt is a former professional baseball player and was drafted in the seventh round of the 2010 Major League Baseball Draft by the Minnesota Twins and later played in the Baltimore Orioles organization. Matt attended the University of San Diego before being drafted by the Minnesota Twins in 2010.

Recently, Peter secured the following sales:

• Multifamily property – $87.5million; 275-units.
• Multifamily property – $35 million; 128-units.
• Multifamily property – $24.5 million; 160-units.

Recently, Matt secured the following sales:

• Multifamily property – $24.5 million; 160-units.
• Multifamily property – $11.4 million; 38-units.
• Multifamily property – $4.8 million; 27-units.

Highlights:

• The Los Angeles multifamily market performed well in the first six months of 2022. Occupancy reached its highest level in more than three years, which helped fuel rapid rent increases. The investment market has remained active and competitive to this point, despite rising interest rates. Additionally, per-unit pricing has trended higher thus far in 2022.
• Area vacancy tightened for its fourth consecutive period, dropping 30 basis points in the second quarter to 3.6 percent. Year over year, the rate improved by 90 basis points.
• Asking rents continued to rise at an accelerating rate in recent months. During the second quarter, apartment rents rose 5.2 percent to $2,352 per month. Year over year, local rents are up 17.7 percent.
• The investment market has been in a strong position through the first half of this year. The median price through the second quarter is $350,000 per unit, up 20 percent from the 2021 figure. Cap rates have remained low, averaging around 3.8 percent in the last three months.

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Highlights:

• The Inland Empire multifamily market continued to record steady operations during the second quarter. Vacancy has remained low, and rents are rising at a rapid pace. The ongoing recovery in the local economy is supporting demand for apartment properties, and multifamily development activity is set to accelerate in the coming quarters.
• The vacancy rate remained unchanged from the start of the year, finishing the second quarter at a still-tight 3 percent. The rate declined 40 basis points during the last 12 months.
• Rents in the Inland Empire continue to rise at a rapid pace. Asking rents gained 2.5 percent in the second quarter to $1,853 per month. Year over year, local rents have spiked 19.7 percent.
• The local investment market strengthened during the second quarter as more properties sold at higher per-unit prices. The median sales price thus far in 2022 has reached $337,600 per unit, while cap rates have held fairly steady, averaging around 3.7 percent in the last three months.

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Highlights:

• Multifamily operating conditions improved in Orange County during the second quarter. Local vacancy tightened and asking rents spiked. The pace of apartment completions has accelerated to this point in 2022, following a slowdown in deliveries last year.
• The vacancy rate improved during the second quarter, dropping 30 basis points in the last three months to 3.1 percent. Year over year, vacancy has tightened by 70 basis points.
• Asking rents jumped in recent months, rising 5.6 percent in the second quarter to $2,466 per month. Apartment rents have spiked 18.8 percent from one year ago.
• The multifamily investment market made gains during the second quarter. The median sales price of properties that traded in the past three months reached $416,700 per unit; year to date, the median sales price is $369,300 per unit. Cap rates held fairly steady averaging around 4 percent.

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Highlights:

• Continued vacancy tightening and a recovering employment market fueled rent gains in Los Angeles County at the start of 2022. Rent growth in the first quarter outpaced neighboring Southern California markets and supported continued investment activity and rising per-unit prices.
• The vacancy rate in Los Angeles dipped 10 basis points in the first quarter to 3.9 percent; this is the lowest area vacancy rate since 2019. Year over year, the rate declined by 60 basis points.
• Asking rents climbed in the first quarter, rising 4.7 percent to $2,236 per month. The pace of rent growth is accelerating; during the past 12 months, rents advanced 13.6 percent.
• The multifamily investment market remained active in the first quarter. The median sales price to this point in 2022 reached $341,400 per unit, up 17.5 percent from the median price in 2021. Cap rates averaged around 3.7 percent at the start of the year.

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• The Inland Empire multifamily market strengthened in the first quarter. Asking rents recorded rapid gains in the first few months of the year while vacancies tightened. Multifamily developers continued to move projects into the construction pipeline to meet persistent renter demand.
• The vacancy rate tightened at the start of 2022, dropping 10 basis points in the first quarter to 3 percent. This marked the third consecutive quarter where the rate improved. Year over year, vacancy has declined by 40 basis points.
• Asking rents jumped 4.5 percent in the first quarter to $1,807 per month, and during the past 12 months, rents have surged 21.5 percent.
• The pace of sales slowed in the first quarter, although transaction activity is in line with the start of last year. Cap rates rose in recent months, averaging about 3.6 percent, while the median sales price reached $276,200 per unit.

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Highlights:

• Stability prevailed in the Orange County multifamily market at the outset to 2022. The vacancy rate remained unchanged, and rents inched higher at a modest pace. While the construction pipeline includes a number of projects, deliveries and absorption were closely aligned to start the year.
• Vacancy held steady in the first quarter at 3.4 percent; this marked the third consecutive quarter at this level. Year over year, the rate dropped 20 basis points.
• Year over year, asking rents advanced 18.3 percent to $2,335 per month. Nearly all of the increase occurred at the end of 2021, and gains were minimal during the first quarter.
• The investment market was dominated by the sale of older, Class C buildings at the start of 2022. Prices dipped in response to the mix of properties changing hands; the median sales price ended the first quarter at approximately $351,300 per unit. Cap rates trended higher, averaging around 4 percent.

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Highlights:

• Multifamily operating conditions improved in Los Angeles during the fourth quarter. Rents continued to climb in recent months and vacancy tightened. Continued recovery in the local employment market should support renter demand in the coming quarters.
• Vacancy in Los Angeles dipped 10 basis points during the fourth quarter, building upon a 40 basis point compression during the prior quarter. The rate declined 50 basis points during 2021, reaching 4 percent.
• Asking rents pushed higher during the final quarter, following a significant spike in the third quarter. Year over year, rents advanced 8.2 percent, ending 2021 at $2,136 per month.
• Multifamily sales velocity accelerated in the last few months of the year. The median price in 2021 reached approximately $290,400 per unit, up 5 percent from the median price in 2020. Cap rates averaged 3.7 percent in the fourth quarter.

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Highlights:

• New renter demand outpaced supply growth in 2021, and this imbalance supported tightening vacancy levels and a spike in rents. Some of the strongest market performance was recorded during the fourth quarter.
• Vacancy declined 30 basis points during 2021 to 3.4 percent, reaching its lowest figure in the market since early 2017. The rate held steady in the fourth quarter.
• Asking rents rose at an unprecedented rate in recent months, advancing 6.4 percent in the fourth quarter alone. Rents ended 2021 at $2,327 per month, up 19.1 percent for the full year.
• Multifamily sales activity spiked in the second half of 2021 as the market reached new highs for transaction volume. Prices pushed higher, reaching $384,700 per unit through the end of 2021, while cap rates compressed to below 3.5 percent in the fourth quarter.

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Highlights:

• The Inland Empire multifamily market concluded a year of rapid improvement in 2021 with additional strengthening in the fourth quarter. Vacancy tightened and rents rose. The improving market fundamentals fueled accelerating investment activity and steep per-unit price appreciation.
• Vacancies tightened during the final quarter, dropping 10 basis points to 3.1 percent. For the full year, the rate declined 60 basis points.
• Asking rents reached record highs during the fourth quarter, ending the period at $1,729 per month. Average rents in the Inland Empire spiked 17.9 percent for the year.
• The investment market strengthened throughout 2021 with the greatest volume occurring in the fourth quarter. Cap rates compressed and prices rose, due to improving property fundamentals and intensifying investor demand.

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Highlights:

• A recovering labor market fueled absorption of apartment units in Orange County during the third quarter, driving vacancy lower and causing rents to spike. Further gains are likely in the next few quarters.
• Vacancy fell 40 basis points during the third quarter, reaching 3.4 percent. Year over year, the rate has declined 20 basis points. The current vacancy rate is the lowest figure in the market since early 2017.
• Rents spiked for the second consecutive period. During the third quarter, asking rents rose more than 5 percent, reaching $2,186 per month. Year over year, asking rents are up 11.6 percent.
• Multifamily investment activity surged during the third quarter, and current transaction volumes have already far surpassed 2020 levels. Prices have pushed higher, with the median price reaching $364,900 per unit year to date. Cap rates have compressed, averaging 3.7 percent.

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Highlights:

• Very strong operating conditions were recorded in the Inland Empire apartment market during the third quarter. With the local economy rebounding, vacancy tightened and rents gained momentum. Investors are responding to the strengthening conditions by increasing activity.
• Vacancy in the Inland Empire dropped 20 basis points during the third quarter, falling to 3.2 percent. Year over year, the rate has declined 50 basis points.
• Following a period of strong rent growth in the second quarter, area rents spiked 10.8 percent during the third quarter, reaching $1,716 per month. Asking rents have increased 17.6 percent year over year.
• Investment activity gained momentum during the third quarter with more properties changing hands in the past three months than closed in the entire first half of this year. Cap rates are compressing as demand intensifies. Cap rates year to date have averaged about 4.1 percent, but in the third quarter, they fell to approximately 3.5 percent.

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Highlights:

• Tight vacancies and rising rents highlighted operating conditions in the Inland Empire multifamily market during the second quarter. While renter demand for units is gaining momentum, inventory growth from new construction is minimal, which will support a tightening vacancy rate in the second half.
• Vacancy in the Inland Empire remained unchanged from the first quarter to the second quarter, holding steady at 3.4 percent. Year over year, the rate has declined 40 basis points.
• The pace of rent growth accelerated during the second quarter. Asking rents rose more than 4 percent in the period, reaching $1,548 per month. Year over year, rents are up 6.5 percent.
• Prices rose in the second quarter. The median price year to date is nearly $242,700 per unit, but the median price in sales during the second quarter approached $320,000 per unit. A few transactions closed around $400,000 per unit.

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Highlights:

• The economy in Orange County is recovering, with employers bringing back workers at a rapid pace. This reopening trend is supporting the local multifamily market. Vacancies inched higher in the second quarter, but the pace of rent growth accelerated, setting the stage for a strong second half of the year.
• Vacancy rose 20 basis points in the second quarter, with the rate inching up to 3.8 percent. Supply growth in the first half has been modest, but absorption has lagged levels recorded in recent years. Year over year, vacancy is up 20 basis points.
• After ticking lower at the end of the last year, rents have bounced back in each of the first two quarters of 2021. Asking rents ended the first half at $2,075 per month, up 5.5 percent year over year.
• The median price in transactions closed year to date is $351,200 per unit, up 13 percent from the median price in 2020. Cap rates have compressed as the economic outlook has brightened; cap rates have averaged 3.8 percent in 2021, down 20 basis points from the past two years.

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Shane Shafer
Managing Director

NEWPORT BEACH, CALIFORNIA (JUNE 28, 2021) – Shane Shafer, managing director of investment sales in NorthMarq’s greater Los Angeles office, earned a spot among top CRE executives with his selection as a 2021 Commercial Real Estate Visionary. The recognition was awarded by Commercial Real Estate: Trends, Updates and Visionaries (a Los Angeles Times-owned magazine).

Check out Shane’s recognition on the Los Angeles Time’s website.

Highlights:

• The Los Angeles multifamily market is returning to normal after a volatile 2020. Businesses are reopening, resulting in an active pace of hiring. Apartment vacancy at the beginning of the year was steady, and rents contracted only a few dollars after sharper declines last year. As the economy strengthens, apartment conditions should improve.
• Vacancy in Greater Los Angeles was flat during the first quarter, holding steady at 4.5 percent. The rate has increased 50 basis points year over year.
• Asking rents in Greater Los Angeles ended the first quarter at $1,968 per month, 6 percent lower than one year ago but down only slightly year to date. The most expensive areas of Greater Los Angeles are the submarkets where rents have contracted the most. Meanwhile, rents have largely held steady in more affordable parts of the county.
• The investment market at the start of 2021 was similar to conditions at the end of last year. Sales velocity declined slightly while prices and cap rates closely tracked 2020 levels.

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NEWPORT BEACH, CALIFORNIA (June 21, 2021) – NorthMarq’s Newport Beach investment sales office bolstered its expanding team with the addition of David Hulme. In his role as associate, Hulme will work with Shane Shafer to provide clients with exceptional service on multifamily acquisitions and dispositions. Shafer and Hulme will leverage NorthMarq’s in-house Newport Beach debt/equity team to integrate financing options with multifamily acquisitions, providing a full range of integrated capital solutions to current and future clients.

“We are extremely excited to have David join our growing team in Newport Beach as he possesses tremendous deal origination and closing experience. David will bring great value to our clients when evaluating their best options for buying, selling or refinancing. He already has an outstanding reputation for evaluating deals and we look forward to our clients benefiting from his access to NorthMarq’s unparalleled real estate services” said Shafer.

Prior to joining NorthMarq in June of 2021, Hulme completed internships with Colony Capital, Walker & Dunlop, and Westar Associates. He holds a Bachelor of Science in Real Estate Development from The University of Southern California.

“I am very excited to join NorthMarq’s exceptional team in Newport Beach. I look forward to working with Shane to provide the best representation for multifamily investors in all of Southern California,” said Hulme. “The team’s proven ability to drive value and achieve results will allow me to deliver the best possible real estate services for our clients.”

Highlights:

• After some mixed performance in 2020, the Orange County multifamily market began this year on an upswing. Deliveries of new units were modest, vacancies ticked lower, and rents rose. Additional improvement is forecast for the remainder of the year as the local economy completely reopens.
• Apartment vacancy dipped 10 basis points in the first quarter, reaching 3.6 percent. The rate has been very steady in recent periods and is identical to the figure from one year ago. Some additional tightening is forecast for the remainder of 2021.
• After some contraction in the second half of 2020, rents crept higher during the first quarter. Asking rents rose 1 percent to start the year, reaching $1,973 per month in the first quarter. Year over year, asking rents are down 1.7 percent.
• The local investment market started 2021 on strong footing, with several large properties changing hands. The median price spiked to $400,000 per unit in deals that closed during the first quarter, while cap rates averaged 3.7 percent.

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Highlights:

• Operating conditions in the Inland Empire strengthened during the opening period of 2021. A break in multifamily deliveries allowed vacancy to compress, while rental rates climbed higher.
• The local vacancy rate improved to start 2021, retreating 30 basis points during the first quarter. Year over year, vacancy has tightened 20 basis points.
• Rents rose throughout 2020 and got off to a solid start to this year. Asking rents rose 1.4 percent during the first quarter, reaching $1,487 per month.
• While multifamily property fundamentals performed quite well during the first quarter, there were only a handful of significant sales transactions. In the deals that did close, the median price reached approximately $237,000 per unit, while cap rates averaged 4.5 percent.

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Highlights:

• After holding fairly steady in the first half of the year, conditions in the Los Angeles multifamily market cooled in the second half. As the economy gains momentum, renter demand should pick up and absorption of area apartments should accelerate.
• Apartment vacancy in Los Angeles rose 70 basis points in 2020, reaching 4.5 percent. Most of the increase occurred in the fourth quarter when the vacancy rate surged 40 basis points.
• Apartment rents in Los Angeles recorded their first annual decline since 2009. In 2020, local asking rents retreated 5.2 percent, finishing the year at $1,973 per month.
• Transaction activity in the fourth quarter closely tracked levels from the previous quarter. There was a sharp increase in the sales of larger properties at the end of the year. Prices rose and cap rates compressed in 2020.

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Highlights:

• The Orange County multifamily market delivered a mixed performance in 2020. Asking rents registered their first decline since 2009, while vacancy was stable as apartment demand stayed resilient.
• The local vacancy rate was steady throughout the year, finishing 2020 at 3.7 percent, unchanged from 2019.
• After briefly surpassing $2,000 per month in the first quarter, rents dipped during the remainder of the year. During 2020, apartment rents contracted 2.3 percent to $1,954 per month; most of the decline occurred in the third quarter.
• The investment market in Orange County was limited for the majority of 2020 by COVID-19. Things shifted at the end of the year, and the fourth quarter was the most active period since the first quarter of 2017. Sales prices and cap rates held relatively consistent to figures from 2019.

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Highlights:

• The Inland Empire was impacted by the pandemic considerably less than the rest of California, and the local multifamily market outperformed in 2020. While the market recorded significant layoffs, major logistics companies like Amazon continue to expand, providing some support to the employment market.
• Vacancy rose 40 basis points in 2020, reaching 3.7 percent, but all of the increase occurred in the first half of the year. During the second half, the rate dipped 10 basis points.
• Apartment rents in the Inland Empire increased 2.6 percent during 2020, reaching $1,467 per month. Rents contracted in nearly all California markets during the year, but the Inland Empire’s healthy absorption totals supported steady rent increases.
• The multifamily investment market gained momentum in the fourth quarter. The median price rose 9 percent in 2020 to $240,000 per unit, while cap rates averaged 4.8 percent. Late in the year, activity picked up in larger transactions; during the final few months of the year, nearly 65 percent of deals traded for more than $50 million.

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Nathan Prouty
Senior Vice President - Managing Director

In its annual Rainmakers recognition, Real Estate Forum has selected Mike Elmore and Nate Prouty as part of the 2020 class. Elmore was previously selected for the recognition in 2017; this is the first time Prouty has been selected. Real Estate Forum selects the winners based upon their transaction track-record, community involvement, and industry leadership. See the full story.

Given the challenges in 2020, the publication noted that the winners had key traits in common: “As we went through the nominations we were more struck than ever with the grit, expertise, and dedication of the people in this particular slice of the CRE industry. Despite the paralysis, deals did get done, complex structures were put in place and innovation ran amok.”

Mike Elmore’s recognition focused on both his transaction volume over many years and his mentoring and leadership in his office:

With more than 30 years of experience, Michael Elmore has demonstrated acute financial skills to guide and oversee complex financial transactions. As an EVP and managing director at NorthMarq, Elmore structures debt and equity transactions. During his 27-year tenure with the firm, he has closed 600 transactions totaling nearly $13 billion, and he has regularly been named as a top producer. Advanced Real Estate Services is one of Elmore’s longest standing clients. The firm has a 10,000-unit multifamily portfolio, and Elmore has worked with them to secure $2.3 billion in financing transactions, leading to loan servicing of $1.2 billion for the firm. When he isn’t working with clients, Elmore is mentoring new talent, both students and new entrants into the firm. Brendan Golding is a prime example of Elmore’s mentoring. Golding joined the firm two years ago and worked closely with Elmore to develop his book of business, resulting in $40 million in loan volume.

Nate Prouty was recognized for his book of business with institutional investors and his significant transaction volume over the last few years:

In 2016, Nathan Prouty became the youngest managing director at NorthMarq. Based in the San Francisco office, Prouty completes debt and joint venture equity production and works with the firm’s life company correspondent lenders to finance core stabilized assets. He has a notable roster of institutional investors and structured finance lenders on hand for opportunistic transactions, as well as relationships with traditional financing sources, including Freddie Mac, Fannie Mae, institutional equity investors, debt funds, and banks. In 2019, Prouty’s office completed $1.42 billion in financing transactions. Personally, his average annual transaction volume is $700 million. In the last five years, he has closed $3.5 billion in debt and equity deals, and he is consistently ranked in the top five producers at the firm. Prouty has closed several notable multifamily deals, including a $336 million Fannie Mae loan on the 1,000 unit Mansion Grove Apartments and a $75 million cash-out refinance on Mediterranean Village, a garden-style apartment building.

MINNEAPOLIS, MINNESOTA (January 11, 2021) — NorthMarq’s Newport Beach office selected Mercy House, which provides housing and comprehensive supportive services for a variety of homeless populations in the Southern California area, as its recipient of a 2020 Community Involvement Grant.

The non-profit Mercy House opened its latest homeless shelter in Huntington Beach, California in Nov. 2020. The 174-bed homeless shelter is the ninth homeless shelter operated by Mercy House, which also operates 16 permanent housing communities in the Southern California area. In addition to physical space, Mercy House offers each client a Housing Navigator upon entry, who works with them to identify needs and barriers upon entering permanent housing. Their clients also receive meals, showers, access to life skills, and additional support all with the focus of permanent housing.

Mike Elmore, managing director – debt & equity of the Newport Beach office, recommended the organization due to his long-time commitment to the Huntington Beach area, where he has been a resident for nearly 50 years and has witnessed the increase and permanency of homelessness in the city.

“I’m proud to support this innovative organization that is working hard to tackle such a big problem in southern California. Their efforts to provide a unique system of dignified housing opportunities, programs, and supportive services are definitely making progress in ending homelessness,” said Elmore. His wife, Tina, plans to become a regular volunteer at the Huntington Beach location in 2021.

“Thank you to NorthMarq’s generous donation to Mercy House. We are grateful that you have chosen to join us in supporting the vulnerable men, women, and children who are homeless or at risk of homelessness. We appreciate the donation and will ensure that we are good stewards of this donation, always upholding the dignity of the clients we serve,” said Jacob Mize, Development Director – Mercy House.

In the third year of NorthMarq’s Community Involvement Grant program, the company has awarded grants to 18 non-profits in 16 cities. The program solicits nominations from each local office, and had an increase of 20 percent from 2019, with a total of 18 non-profits focused on affordable housing and reducing homelessness receiving these grants in 2020. NorthMarq’s 2020 grant to New Hope Housing represents its third award under the Community Involvement Grant program.

Shane Shafer
Managing Director

LOS ANGELES, CALIFORNIA (DECEMBER 11, 2020) — 2020 has been the most unique year that I have seen in my 20 years of experience in this business. At the start of 2020, the multifamily market was coming off a very strong 2019 that navigated changes such as the monumental rent control bill known as AB 1482. Investors were poised for another great year until the pandemic began, which inserted widespread uncertainty into the market. Questions began to arise about whether multifamily would be able to sustain its success or if COVID-19 would be as detrimental to the market as it had been to retail and office properties.

As the pandemic erupted and shutdowns were ordered, investor sentiment became wary over a potential shift toward unfavorable market fundamentals. However, for most SoCal owners of multifamily, it proved to weather the storm during this pandemic and more confidence was instilled in the apartment market as one of the top asset classes.

Read more about surprising stability in the market and a recently sold and financed multifamily property in Anaheim.

Alex Kane
Vice President - Producer

Kane will work in two Southern California offices – Los Angeles and Newport Beach

LOS ANGELES, CALIFORNIA (December 9, 2020) — Alex Kane has joined NorthMarq as vice president in its Los Angeles office. In his role, he will be responsible for the origination of debt/equity across all major asset classes working from both the Los Angeles and Newport Beach offices. He has more than 10 years of commercial real estate finance experience, successfully closing in excess of $2 billion in commercial real estate transactions.

“Alex is a seasoned producer with a strong client base and will be a part of both the Los Angeles and Newport Beach offices’ growth plans,” said Michael Elmore, executive vice president/managing director of NorthMarq’s Newport Beach office.

Prior to joining NorthMarq, Kane was a director in the Capital Markets Finance Group for JLL’s Los Angeles office. Before this, he was a senior associate in the Los Angeles office of CBRE, part of their Debt and Structured Finance Group. Kane also previously held positions at Jupiter Holdings LLC and Lyon Living, both headquartered in Newport Beach.

“I’m excited to join NorthMarq and help contribute to the ongoing success and growth of the Los Angeles and Newport Beach offices. More importantly, I look forward to continuing to provide my clients with premium service by leveraging NorthMarq’s industry-leading platform,” said Kane.

Kane received his B.A. from the University of Colorado at Boulder. He is a member of the NAIOP, Urban Land Institute and Mortgage Bankers Association.

Highlights:

• The Orange County multifamily market showed signs of weakening in the third quarter for the first time since the pandemic struck. Asking rents recorded a notable pullback, while the vacancy rate held steady.
• In each of the first three quarters this year, the local vacancy rate has been 3.6 percent. Year over year, vacancy has tightened 30 basis points.
• Current asking rents are $1,958 per month, down 2 percent from the second quarter. The quarterly retreat shifted year-over-year measurements into negative territory; asking rents in Orange County have declined by 1.2 percent in the past 12 months.
• Sales velocity in Orange County is typically modest, and COVID-19 has further stalled activity in the investment market. In the few deals that have closed, prices and cap rates have remained relatively steady compared with last year’s numbers.

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Highlights:

• The Inland Empire multifamily market outperformed its California peers in the third quarter. Local rents held steady, while vacancy inched lower.
• After rising 50 basis points from the final quarter of 2019 to the second quarter this year, multifamily vacancy got back on track. In the third quarter, the vacancy rate dipped 10 basis points to 3.7 percent.
• Apartment rents ended the third quarter at $1,459 per month, 3.4 percent higher than one year earlier.
• The multifamily investment market picked up steam in the third quarter. Prices also increased, bringing the year-to-date median to approximately $234,900 per unit.

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Highlights:

• The Inland Empire multifamily market posted healthy levels of absorption and rent growth in the first half of 2020, although an active period of deliveries drove the local vacancy rate higher.
• Multifamily vacancy rose 20 basis points in the second quarter, reaching 3.8 percent. Year over year, the rate is up 50 basis points.
• While vacancy has crept higher, the Inland Empire has still recorded some of the healthiest rent growth in the country. Asking rents ended the second quarter at $1,454 per month, 4.4 percent higher than one year earlier.
• The investment market cooled in the first half, repeating a trend that has occurred in recent years. The median price is up 5 percent from the 2019 figure, reaching approximately $230,200 per unit.

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Joe Giordani
Senior Vice President - Managing Director

Scott Botsford
Senior Vice President - Senior Director

LOS ANGELES, CALIFORNIA (July 22, 2020) – During challenging market conditions due to Covid-19, NorthMarq’s Los Angeles and Newport Beach offices continued to provide real estate financing solutions for their clients by leveraging the company’s national network of buyers, sellers, equity partners, and lending sources. Year-to-date, the Los Angeles and Newport Beach office have secured more than $600 million in financing; lending sources include Fannie Mae, Freddie Mac, correspondent life company lenders, pension funds, banks, CMBS lenders, debt funds, credit unions, and other investment companies.

Joe Giordani, senior vice president/managing director of NorthMarq’s Los Angeles/Newport Beach office noted the diversity of transactions completed by their team.

“During the Covid pandemic, we’ve relied heavily on our national platform of capital sources to secure financing for both private and institutional property owners. A few examples include agency debt on apartments, bridge loans on office and retail properties, and life company lenders financing moderately leveraged stabilized properties,” Giordani said.

“The capital markets are more cumbersome to navigate given the current uncertainty due to the pandemic. NorthMarq’s decades of trusted relationships have been important to our success this year. They’ve been the key to uncovering the right capital partner and closing loans for our clients.” said Scott Botsford, vice president, debt & equity.

A few examples of recent transactions:

• NorthMarq completes $18.5 million bridge loan for hotel-to-multifamily conversion in San Gabriel, California
• NorthMarq finalizes $10 million refinance of Lambert Industrial in Fullerton, California
• NorthMarq negotiates $3.4 million refinance of mixed-use property in San Juan Capistrano, California

Highlights:

• The fourth quarter was a strong period for the Orange County apartment market, with vacancy tightening and rents rising. Construction has been active as developers bring new units to the market to meet renter demand.
• Multifamily vacancy in Orange County ended 2019 at 3.7 percent. The rate dropped 20 basis points in the fourth quarter and fell 30 basis points from one year earlier.
• Asking rents rose 2.9 percent in 2019, ending the year at $2,000 per month. The strongest gains of the year were recorded during the fourth quarter.
• In 2019, the median price reached $317,500 per unit, while cap rates averaged approximately 4 percent. Prices rose and cap rates compressed during the fourth quarter.

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David Blum
Senior Vice President - Managing Director

Joe Giordani
Senior Vice President - Managing Director

NEWPORT BEACH, CALIFORNIA (January 29, 2020) – The Newport Beach office of NorthMarq announces the promotion of David Blum and Joe Giordani to the role of managing director. Both producers represent the culmination of NorthMarq’s commitment to training and long-term investment in developing its leadership talent.

“With my long-time co-managing director Ory Schwartz opening a Los Angeles office, a great opportunity has been created for David and Joe to accept expanded leadership roles and to increase awareness of our brand in the market,” said Michael Elmore, managing director of the Newport Beach office.

Blum’s promotion to managing director comes after 18 years with NorthMarq, during which he moved from analyst, to vice president, to senior vice president/managing director, while closing more than $2 billion in debt and structured finance transactions nationwide. He will continue to focus on delivering financing solutions to clients, while taking on more leadership responsibilities of the Newport Beach office.

“David is a long-term employee who started with us in 2002 and has consistently generated strong loan volumes, helped in recruiting new employees in both the analyst and new producer roles, and has been active in networking events promoting us outside of the company,” said Elmore.

Prior to joining NorthMarq, he worked as an environmental engineer/consultant for real estate transactions. Blum is a licensed Real Estate Professional in the state of California. Blum has served multiple terms on the NorthMarq Producer Council and is on the Board of Building Block Foundation Fund, an organization that serves under-privileged kids in the greater Orange County area.

He holds two B.S. degrees from UC Santa Barbara and an MBA from USC in Finance and Operations.

Giordani will join David and Mike to manage NorthMarq’s Newport Beach office. Along with his additional new leadership duties, he will continue to help clients fulfill their commercial and multifamily capital needs by offering debt and equity solutions through NorthMarq’s preferred life insurance correspondents, Fannie Mae, Freddie Mac, HUD, Wall Street conduits, pension funds, debt funds, banks, credit unions and other prominent capital sources.

“Joe has been with us since 2014, and his production volume has been consistently increasing each year. He has been instrumental in recruiting and training our new producers. He participates in various industry organizations and recently joined the young leaders group for the Mortgage Bankers Association, which indicates his industry leadership,” said Elmore.

Giordani joined the Los Angeles office of NorthMarq in 2014 and was selected as the “Rookie of the Year” for NorthMarq in 2015. He was promoted to senior vice president in 2018 and selected to a three-year term as a member of the company’s Producer’s Council in 2019.

Giordani is a graduate of the NAIOP Young Professionals Group and an active member of NAIOP Southern California. He is a licensed Real Estate Broker in the State of California and holds a Bachelor degree in Economics from the University of Colorado at Boulder with a minor in Business.

Highlights

• Apartment fundamentals did not change significantly in the Inland Empire during the third quarter. The vacancy rate inched higher and rents ticked up, but the market has been quite consistent throughout 2019. Deliveries should pick up in the fourth quarter, providing some modest supply-side pressure.
• Multifamily vacancy ended the third quarter at 3.4 percent; the rate is up 20 basis points year over year.
• Asking rents rose 0.9 percent in the third quarter, reaching $1,405 per month. During the past 12 months, asking rents have advanced 3.7 percent.
• Investment activity in apartment properties accelerated during the third quarter, and the sales continued into the fourth quarter. The median price in sales thus far in 2019 is approximately $229,000 per unit, and cap rates have averaged 4.9 percent.

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Highlights

• The Orange County multifamily market strengthened in the third quarter, with rents rising and vacancy dipping below 4 percent for the first time in more than a year.
• Vacancy fell 30 basis points from the second quarter to the third quarter, dipping to 3.9 percent. The rate is 10 basis points lower than one year ago.
• Rent growth has been averaging slightly less than 1 percent per quarter in recent periods, a trend that continued during the third quarter. Year over year, asking rents have increased 2.8 percent, reaching $1,981 per month.
• Sales activity was consistent from the second quarter to the third quarter, with the bulk of the activity occurring in sales of properties having fewer than 100 units. The median price thus far in 2019 is $307,000 per unit, with cap rates holding steady at approximately 4.2 percent.

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Daniel McCarthy in our Los Angeles office celebrates 20 years with the company this week. Thanks for being part of the team, Daniel!

Highlights:

• Multifamily properties performed well in Greater Los Angeles during the second quarter. The market benefited from a healthy pace of job growth and a dip in the delivery of new units.
• Vacancy in Los Angeles County held steady at 3.6 percent during the second quarter; the rate is up just 10 basis points year over year.
• Local asking rents closed the first half of the year at $2,043 per month, up 5 percent from one year earlier. Some of the strongest growth is being recorded in Downtown Los Angeles.
• The investment market strengthened in the second quarter with transaction activity ticking up, prices rising, and cap rates compressing. Cap rates have averaged 4.4 percent thus far in 2019, but rates dipped to 4.25 percent during the second quarter.

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Highlights:

• The Orange County apartment market posted mixed performance during the second quarter. Vacancy rose and rent growth leveled off even as the employment market recorded healthy gains.
• Vacancy rose 20 basis points in the second quarter to 4.2 percent, up 30 basis points from one year ago.
• Rents continued to advance, although the pace of increases was more modest than in recent years. Asking rents in Orange County ended the second quarter at $1,968 per month, 2.5 percent higher than one year ago.
• Sales activity during the second quarter was a bit lower than levels from the first three months of the year. Prices rose as larger property sales accounted for a more significant share of total activity. Cap rates have averaged 4.5 percent thus far in 2019, up from 2018 levels.

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Highlights:

• The Inland Empire apartment market posted steady performance in the second quarter. Construction was modest, vacancy was flat and rents rose. Looking ahead to the second half of the year, construction is forecast to pick up, which is expected to push the vacancy rate higher.
• Multifamily vacancy held steady at 3.3 percent during the second quarter. The rate is 10 basis points higher than one year ago.
• Rents continue to trend higher at a steady pace. Asking rents rose 4 percent year over year, ending the second quarter at $1,393 per month.
• Sales of multifamily properties gained momentum in the second quarter. The median price has risen to $228,900 per unit, and cap rates have compressed below 5 percent.

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Shane Shafer
Managing Director

Shane Shafer featured in Connect California

Southern California continues to be a market that is highly sought after. The first half of the year saw fewer sales than in recent years. This has created an even larger increase in demand from buyer and capital to buy, as investors see Southern California as a market with great fundamentals that continues to improve each quarter. We have seen that those that have a presence in So Cal want to expand their portfolios, others that do not have a presence are aggressively bidding on properties to build scale and have a presence in one of the most sought-after markets in the county.

Investors are attracted to the stability, quality assets and consistent returns they find throughout Southern California. People believe that the region is poised to withstand a correction that could possibly occur down the road better than some other areas of the country, and they also like the renter demand drivers. Job growth remains strong through the region, and people who are attracted to the Southern California quality of life continue to support a robust renter market.

Recent NorthMarq research shows consistently high occupancy levels and rising rents, both of which support continued growth in net operating incomes. Vacancy rates are hovering at 4% in Orange County; 3.6% in Greater Los Angeles and 3.3% in the Inland Empire. Los Angeles, in particular, saw annual rent growth surge to 6.1% in the first half of the year.

Investors looking to buy in Southern California understand that assets come with a pricing premium, due to the highly competitive nature of the market. Cap rates are averaging 4% in Orange County, 4.5% in Los Angeles and the low 5% in the Inland Empire. The low cap rates are a testament to just how well the market is performing, and the further drop in interest rates is likely to put even more downward pressure on cap rates.

The current climate that includes low interest rates, strong fundamentals and a competitive buyer pool are all signs that suggest the second half of the year is shaping up to be a very active investment marketplace.

There continue to be good opportunities for both buyers and sellers. Sellers are enjoying the competitive bid environment. Every assignment that NorthMarq is working on these days is generating multiple bidders.

Buyers like the continued strength they see in fundamentals, which is supporting greater confidence that the market is not at the peak for rents, and there is still opportunity ahead to increase rents and net operating income.

Highlights:

• The Orange County multifamily market was very steady during the first quarter of 2019. Vacancy was unchanged from the preceding quarter and rents rose. The pace of deliveries slowed, but there are several projects that are slated to be delivered in the coming quarters.
• Vacancy held steady at 4 percent, matching the rate from both the third and fourth quarters of 2018. The current rate is 30 basis points higher than one year ago.
• Rent growth in Orange County continues to rise at a consistent pace. Asking rents have advanced 3.4 percent year over year, ending the first quarter at $1,961 per month.
• Sales activity in the first quarter lagged levels from preceding periods. The median price in the first quarter was approximately $235,800 per unit, while cap rates averaged 4.4 percent.

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Highlights:

• The Greater Los Angeles apartment market benefited from steady renter demand and a slowdown in supply growth during the first quarter. Deliveries slowed, but the development pipeline is quite full, and developers are likely to bring thousands of new units to the market by the end of this year.
• The vacancy rate in Los Angeles County has remained in a very tight range for the past several years and stability is likely to persist in the coming quarters. The rate fell 10 basis points in the first quarter reaching 3.6 percent. Year over year, vacancy is up 10 basis points.
• The local multifamily market continues to record rent increases. Asking rents rose 6.1 percent in the 12-month period ending in the first quarter, reaching $2,029 per month.
• Investment activity slowed to start 2019, following a strong 2018. A drop in the number of Class A property sales was the primary driver of the sales dip. The median price in the first quarter was $225,000 per unit, while cap rates averaged 4.5 percent.

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Highlights:

• After a strong close to 2018, the multifamily market in the Inland Empire got off to a slower start during the first quarter of this year. Some of this is attributable to a more modest rate of employment expansion; the pace of job growth is expected to gain momentum going forward.
• Apartment vacancy ticked up 20 basis points during the first quarter, reaching 3.3 percent. The rate is up just 10 basis points from one year ago.
• Asking rents ticked up during the first quarter, rising to $1,370 per month; rents are up 3.8 percent year over year.
• Sales activity to start 2019 was slower than in recent periods and was concentrated in apartment complexes with fewer than 100 units. The median price dipped a modest 3 percent during the first quarter, while cap rates ticked up 20 basis points to the low 5 percent range.

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Scott Botsford
Senior Vice President - Senior Director

LOS ANGELES, CALIFORNIA (May 2, 2019) – NorthMarq’s Los Angeles office welcomed Scott Botsford to its production team. In his new role as vice president, Botsford will specialize in commercial and multifamily real estate finance and capital advisory services. He has the ability to service his client’s various financing strategies, through NorthMarq’s preferred life insurance correspondents, Wall Street conduits, Fannie Mae, Freddie Mac, HUD, debt funds, banks, credit unions and other prominent lenders.

“We are excited to have Scott as part of the team, he has a proven track record and fully understands real estate finance. Whether meeting the demands of our Orange County clientele or assisting with regional and national-wide financing, he will be a great addition to our office,” said Michael Elmore, executive vice president/managing director.

Botsford has been active in the commercial real estate capital markets industry for more than 10 years. Prior to joining NorthMarq, he worked for a regional mortgage banking company, specializing in structured finance. Before his mortgage banking experience, Botsford served as the Director of Acquisitions & Finance for an institutional real estate investment company.

“Scott’s prior experience makes him a perfect fit for our company and office. With the extensive platform that NorthMarq offers, we are looking forward to Scott growing his business and providing his existing clients and future clients with the full array of financing options,” said Ory Schwartz, senior vice president/managing director of NorthMarq’s Los Angeles office.

He is a licensed Real Estate Broker in the State of California and holds a Bachelor degree in Public Policy, Management and Planning from the University of Southern California.

Shane Shafer
Managing Director

Taylor Snoddy
Managing Director

CoStar recently announced its 2018 Power Broker Awards, celebrating the top CRE firms and brokers in the United States. NorthMarq’s Shane Shafer, managing director of NorthMarq’s Los Angeles office and Taylor Snoddy, managing director of NorthMarq’s Dallas office were recognized as Top Sales Broker in their markets. NorthMarq’s Phoenix and Dallas offices each earned a place in the ranks of Top Sales Firms in their markets.

Shafer and Snoddy were recognized for achieving high levels of sales transaction volume in their regions. The Top Sales Broker award distinguishes individuals based on the CoStar market in which the individual is located and is calculated using pricing information from closed sales transactions contained in CoStar’s COMPS database.

See Shafer’s listing here.

See Snoddy’s listing here.

The Phoenix and Dallas offices were listed due to their high levels of sales transaction volume in 2018. The Top Sales Firm award is bestowed upon recipients based on the CoStar market in which the company is located and is calculated using pricing information from closed sales transactions contained in CoStar’s COMPS database.

See the Phoenix listing here.

See the Dallas listing here.