Demand Returning For 2 to 4 Unit 'Plexes'

Portland’s residential market posted one of its strongest months in years in August. Not surprising, the residential rebound is driving a revival in a related market: Small apartment complexes. Tyler King, a broker with Carmel Siler Realty, specializes in an exceedingly narrow section of the commercial real estate market — the two- to four-unit apartment complexes, aka “plexes.” Plexes are a critical piece of the multifamily market, providing not only housing, but opportunities for first-time investors. Joe Weston, principal with Weston Investment Co. and one of the region’s most successful investors, famously began investing with a duplex.

 

The plex market is on the rebound, King reports after researching trends for the past 10 years.

 

The market rose — and fell — with the single family market. The average price for a plex peaked in 2007 at $152,515 per unit or $384,720 per transaction. Volume peaked in 2005 at 650 units transacted.

 

Since 2007, the impact of the recession has been obvious. The average price per unit fell more than 21 percent.

 

There were fewer sales and longer market times.

 

In short, it was a buyers’ market.

 

King said that’s changing. He expects more than 200 transactions in 2012 for the first time since 2007. The average unit price has revived, reaching 2009 levels. Properties take an average of 44 days to sell, down from the record high of 70 set in 2011.

 

“The limited listing inventory and sluggish national economy have been the main hurdle holding the market back from a true breakout,” he reports.

 

Wendy Culverwell  Business Journal 9/14/2012