Capital continues to flow into Washington’s apartment market. In fact, 2013 saw the highest sales volume in the local apartment property market’s history, doubling the 2012 total. All this activity placed Washington second nationally, just behind New York City, in total sales volume for apartment property.

One intriguing aspect behind the uptick in sales volume is the role institutional capital can play in determining who buys and sells commercial property, and how sales can result from one group of investors moving out of a particular property “play” as another group moves in.

In 2011, investment managers were net buyers of almost $2 billion worth of Washington apartments. Just coming out of the recession, investment managers had access to more capital and could buy apartments at a discount with the expectation of price appreciation over the next few years.

Some buyers came back to the market aggressively in 2013. Because of the recession, national and regional developers and owners did not have the capital to deploy until recently. This year, though, national and regional developers and owners were net buyers of more than $2.5 billion in apartments in the region.

The recent sale history of the Point at Park Station in Manassas encapsulates the past several years of Washington apartment transactions. CBRE Global Investors, an investment manager, purchased the property (then called Haverhill Apartments) in 2011 from LNR Property Corp., a national developer/owner, when investment managers were primary buyers.

CBRE then sold it to Pantzer Properties, another national developer/owner, in September 2013 in part because the fund that held the property was being closed at the end of the month.

This shows that buying cycles will continue to have an impact on the local economy, as different sets of investors buy and sell properties.

With investor interest for apartments in the region still high, competition for best-in-class projects has increased, however pricing has stayed relatively flat. All the new apartments popping up across the city have suppressed any real price growth. Investors buying apartments in the region may have to look beyond price appreciation and accept apartments for what they are: a great source of income.

Connor Bevans is a real estate economist and Mark Hickey is a senior real estate economist with CoStar Group.