Rising interest rates are taking the air out of bubbly property valuations. Apartment prices are down 21% over the past year, according to the Green Street Commercial Property Price Index. This makes them the second-worst performing category of real estate after offices, which have lost 25%. Institutional investors tend to own fewer individual family homes, where values have been more resilient so far.
Shares in listed real-estate investment trusts that specialize in owning and managing apartment blocks have followed the value of their underlying assets down. AvalonBay Communities, Inc. and Apartment Income REIT Corp. have lost one-third of their value over the last 12 months.Housing Is Turning Out to Be a Lousy Shelter for Investors – WSJ