Investors Bullish on Raleigh-Durham Apartment Market


Investor interest in Raleigh-Durham continues to heat up, as the area cements its reign as one of the hottest secondary markets in the nation.

The cap rate compression in primary markets has fully trickled down to less densely populated areas like the “Research Triangle,” the tech-heavy region anchored by North Carolina State University, Duke University, UNC-Chapel Hill, and the cities of Raleigh, Durham, and Chapel Hill.

Since the beginning of the year, at least five multifamily sales in Raleigh-Durham registered cap rates of 6 percent or less. “It’s amazing that we’re seeing cap rates in the low-5 percent range again,” says Dan Fasulo, managing director of New York-based market research firm Real Capital Analytics.

But investors active in the market aren’t quite as amazed by the swift rebound in values. A combination of rapidly improving fundamentals and very low-cost debt is helping to make those low cap rates pencil out in Raleigh-Durham.


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