Multi-Housing Sales Prices Rise Sharply as Private Investment Groups Move into Market.

SAN FRANCISCO--(BUSINESS WIRE)--Jan. 30, 1997--Prices and demand for multi-housing properties across the nation are up substantially over a year ago, with the influx of private investment groups being one of the biggest changes, according to research compiled by CB Commercial Real Estate Group, Inc. the nation's largest diversified commercial real estate company.

"In downtown San Francisco and the Silicon Valley area, rents are as high as $2.25 per square foot, and the best buys are still in the outlying areas," according to Tyler Anderson, first vice president, multi-housing in CB Commercial's Phoenix office and a member of the company's National Advisory Council on Multi-Housing.

"We used to see private investment groups buying apartment complexes in the $3-8 million range," said Tyler. "Today we are seeing sales in the $20 million range.

"These groups are getting many of the best deals because they are able to aggressively compete with the traditional Real Estate Investment Trusts and institutional buyers. They will meet on Saturday and close on Monday. In contrast, the institutional investors and the savings and loans are not moving as quickly or as aggressively as they used to," he added.

In the San Francisco Bay Area prices for multi-family properties are up 25 to 40 percent over one year ago in selected areas, primarily San Francisco and Silicon Valley.

"Demand is strongest in the larger, high-quality new complexes of 100 units or more," said Jon Paulson in CB Commercial's San Francisco office. "The primary demand is from REITs that are either based locally or that have local offices."

Anderson believes that 1997 will bring one of the strongest markets in the past 10 years because of lower interest rates, the availability of debt, a strong economy and strong job growth.

"If you are a seller, you can make a good profit," he predicted. "If you are a buyer, you can get a 9 to 10 percent return on equity. This year will be a good year for everyone.

"Particularly popular are properties with security gates and direct access garages. Most newer properties pass water and sewer charges on to the tenants, and many older buildings are being retrofitted to allow this," Anderson added.

CB Commercial, established in 1906, has more than 80 offices located throughout major markets nationwide and an additional 90 offices internationally through strategic alliances. These offices track demographic and consumer trends, property values and multi-state transactions with sophisticated computer technology. The company's 1995 activity in the United States included more than 21,000 assignments and transactions and a revenue base of $470 million. Bay Area offices are located in Oakland, San Francisco, Foster City, San Jose and Walnut Creek. Additional information is available on the Internet at http://www.cbcommercial.com .

CONTACT: CB Commercial Real Estate Group, Inc.

Elena M. Cerda, 415/772-0303 Pager: 415/301-6271

or

MCA 

Jo Murray, 510/238-8430 Pager: 800/492-9786