Colliers reports that the Portland metropolitan area ended 2009 with just $230.0 million in multifamily sales (excluding the $65 million Cyan Building transaction, purchased by an out-of-state REIT). This number represents a 78 percent drop from the $1.05 billion posted in 2008. Meanwhile, the average capitalization rate, which measures the relationship between property value and net operating income, ended the year at 6.8 percent, the highest level seen since 2005.

Though rising cap rates are a hard pill to swallow for owners who purchased at the height of the market, Colliers reports that historic averages are in the seven to 10 percent range.

“The important thing for owners to realize is that more and more investors are stepping into the action, looking to buy,” noted Beth DuPont, a senior broker at Colliers. “Pair that with the fact that multifamily financing is still available, and owners are going to have more options to consider in 2010 than they did in 2009.”

Colliers predicts transaction volume will increase in 2010 as sellers lower their pricing expectations to align with current market values. The firm also anticipates little or no rental rate growth and continued rental concessions as owners face vacancy rates in the six to seven percent range.