Salt lakes real estate

BlackRock and Cadre team up for apartment building in Salt Lake City, UT where housing prices have risen more than 50%

The real estate investment platform Frame yesterday announced its partnership with BlackRock’s noir BlackRock Impact Opportunities Fund to acquire The Harvest at Marmalade Apartments, a 252-unit multifamily asset in downtown Salt Lake City, Utah.

The BlackRock Impact Opportunities Fund launched in 2021 with a $1 billion goal to uncover investment opportunities in undercapitalized businesses and communities ready to grow.

The latest acquisition will bring Cadre’s total number of actively managed multi-family investments to 16 assets. According to the company’s website, most of its active multi-family investments have a value-added strategy, which involves making improvements to a property in order to add value through increased rent collections.

Related: New multi-family real estate investment offering in the San Francisco Bay Area with a target IRR of 15.8%

According to a FOX 13 article, Salt Lake City has seen the third-highest rent increase in the past three years of all major US metros, while house prices have risen 50% in the past two years. The median home sale price in Salt Lake City is $562,500, nearly 25% higher than the national average.

Institutional investors have been aggressive in acquiring multi-family and single-family rental properties as demand for rental housing continues to soar due to increasingly unaffordable homeownership.

Over the past three years, the sale price of existing homes in the United States has increased by 40.62%, while the median income of American families has increased by only 13.62%. Recent interest rate hikes have only made the affordability problem worse, leaving many families with no choice but to rent.

Data source: Ycharts

Retail investors have also taken note of this growing demand for rentals. Investment activity on property investment platforms that offer co-ownership of income-generating properties or access to crowdfunding deals has increased significantly since the start of 2021. Most of the properties offered on these platforms are multi-family assets, single-family rental homes and build-to-let community developments.

Related: Jeff Bezos ups his bet on the single-family housing market

While some worry about an impending real estate crash, Moody’s Analytics estimates the housing shortage is more than 1.5 million homes nationwide. The shortage could mean a prolonged period of inflated house prices and continued rising demand for rentals across the country.

Photo by Andrew Zarivny on Shutterstock

Mary Cashion

The author Mary Cashion