In its most recent sales report, New York–based Real Capital Analytics (RCA) says apartment sales volume rose 53 percent to $3.8 billion in January. The jump in volume was fueled by the sale of two trophy New York properties. The first was Two Cooper Square, a $134 million deal between seller New York-based Atlantic Development Group and buyer Wafra Investment Advisory Group (the Kuwaiti government's social security fund). The second property was Columbus Square, a $630 million deal between sellers Chetrit Group, based in New York, Stellar Management, headquartered in Silver Spring, Md., and buyers MetLife, based in New York, and UDR, the Denver-based REIT. Without the sale of those two properties, sales would have risen only 21.8 percent.

“These are both newly built [deals],” says Ben Thypin, a senior market analyst for RCA. “There are not that many newly built Class A, institutional-quality properties in New York.” The total number of properties actually fell year over, dropping from 206 to 184 properties sold nationally. However, in December 2010, 442 properties sold, compared with 531 properties sold in December 2011. 

An active December is one of the reasons Thypin thinks the market is healthier today. “We're coming off of a more active December,” he says. “Yields actually went up slightly. It's a healthier market but still not gangbusters.”

Gary T. Kachadurian, chairman of the board for Atlanta-based brokerage firm ARA, says his company's January volume more than doubled, going from $182 million to $392 million. He says this was fed by rent increases, improving values, and cheap debt. “We've had a big volume increase this year,” he says.

After seeing their sales pace slow some over the past year, mid- and high-rises led the charge in January. But skewing that figure somewhat was that 87 percent of that volume occurred in Manhattan. The two trophy properties accounted for 37 percent of all high-rise deals.

The number of smaller mid- and high-rise deals outside of Manhattan increased, which meant a jump in cap rates. The prices and yield for garden communities, a big driver of sales in 2011, remained the same. Sales of garden properties were sold for $1.8 billion, a 26 percent increase from last year. “There's so much garden product out there,” Thypin says. “There are only so many high-rise properties available.”

The distressed market continues to slow, as sales fell 45 percent compared with January 2011. That made up less than 8 percent of overall volume. That trend is showing up in some of the bubble markets, but there is still some room for recovery in others. “In Phoenix, we're seeing a market that is a bit more normalized, comprised of more market-type buyers and sellers,” says Nick Ingle, director of capital markets for Phoenix-based Hendricks and Partners. “Las Vegas is a different story and is still dominated by distress sales and opportunistic investors. The Nevada market is probably the last major ”˜turnaround' market in the U.S., and many investors are sensing that 2012 represents the inflection point for operations and value.”