Earlier this month, we reported that Portland apartment values might be headed for a plateau. IMG Northwest's latest numbers show investment sales in the market are slowing down.

In 2011, there were 160 sales of apartments in the Portland market, totaling just over 11,400 units, according to IMG. In 2016, there were 275, totaling more than 16,100 units. The average cap rate for apartment deals dropped from 6.7% to 5.51% as the average transaction swelled from $7.3M to $10.6M. Total sales in 2011 were about $1.1B; in 2016, the total was over $2.9B.

But 2017 has gotten off to a slower start for apartment investment sales. In the first two months of this year, total sales were $302M, compared with $333M for the same period in 2016, and $131M of the sales in February 2017 represented a single portfolio sale, IMG Northwest vice president Steve Morris said.

What is slowing things down? The prospect of slower rent growth might be a factor.

“Portland rents, in general, are leveling off after a couple of years of large rent increases, roughly 10% year-over-year," Morris said. "The most pressure is felt on high-end ($2K or more/month) urban units, since 85% or more of recent construction was targeted at that market."

However, mid- to low-rent apartments are still in demand, with tenants seeking more exurban accommodations in return for lower rent. "We don’t anticipate rent growth beyond 5% for the next few years for all apartments.”