Colliers furthered the expansion of its multifamily valuation team with an executive to lead the effort to enhance its business in California, a state where apartment values and prices have fallen in the past year due to tighter capital markets.
The firm selected Scott Shouse, a 23-year Colliers veteran, to serve as California multifamily valuation and advisory services group leader. In this new role, Scott will oversee the effort to increase multifamily appraisal revenue and expand client relationships, the firm said. He also will play a role in recruiting and training team members and collaborating with multifamily specialists in Colliers’ six California offices and work on the group's national initiatives in the coming year as co-lead of Colliers’ multifamily advisory committee.
With Shouse's move to a regional role, Colliers hired Andy Burger to serve as the new managing director for the multifamily valuation services group in the Sacramento area. Burger, who previously was the founder and president of Burger Valuation Consultants, will help Colliers expand its multifamily valuation group, Colliers said. Burger began his appraisal career as a generalist and has since created a niche in affordable housing valuation.
As part of its expansion, Colliers also added Doug Callow, a licensed appraiser with over 20 years of experience, to the multifamily valuation team for the Sacramento area.
Apartment Values in Flux
Colliers is adding to its multifamily valuation team in California during a fluid time in the market. The multifamily sales market, which had been a top performer among property sectors for several years, has been in flux over the past year as access to capital has remained tight and rent growth has slowed. As a result, the number of apartment complexes that traded has dropped along with the prices paid for them, according to data.
In Sacramento, the annual apartment sales volume hit $299 million over the past 12 months, when 76 transactions closed. "This is a far cry from the three-year average of $1.2 billion," according to a report from CoStar Market Analytics. "The slowdown in activity overall can be linked to slowing rent growth, rising vacancy, a disconnect between seller expectations and buyer pricing, and increased financing costs associated with higher interest rates."
On a per-unit basis, apartment pricing in the Sacramento market now averages $234,000, a drop of 9.2% from a year ago, according to CoStar.
Prices also have fallen in the much-larger Los Angeles apartment market that has more than 1 million units, according to CoStar data. Over the past 12 months, the price paid per unit for apartment complexes fell 10.12% to $350,831, CoStar data shows. The total value of multifamily sales in the fourth quarter was $1.3 billion and lagged the $2.2 billion of quarterly apartment sales the market has averaged over the past decade, according to a report from CoStar Market Analytics.
As for Colliers, it has been working for the past several months to expand its multifamily valuation business in the West. In December, it hired Kelly Hyde as a valuation services director to work in Denver and the Mountain West region. Hyde, who has a track record of providing appraisals for large firms such as Fannie Mae and Freddie Mac, previously served as senior director at JLL and a managing director at Apprise by Walker & Dunlop.
For Colliers, it said the promotion of Shouse and the new hires are "part of a strategic plan to strengthen the multifamily valuation services platform and reinforce its presence in California and the West region."