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Increased Cost of Capital Forces a Reset of Multifamily Valuations

August 11, 2022

In an interview with Wealth Management Real Estate, Derek Graham, President and Principal at Odyssey, shares his insight on how the increased cost of capital has forced a reset of multifamily valuations.

Buyers are beginning to ask for discounts and some deals fall through. But experts say the disturbance in the sector is based on “short-term uncertainty.”

In early June, two days before the Federal Open Market Committee increased the Federal Funds Rate by 75 basis points, Odyssey Properties Group struck a deal to buy a multifamily asset in Dallas at a 3.5 percent cap rate. The Los Angeles-based real estate investment firm was hoping to add the garden-style property to its existing portfolio, which consists of 44 properties comprising 7,217 multifamily units across 14 states with a total estimated value of more than $1.5 billion.

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