Apartment communities in Miami Beach sold at higher prices relative to income than the properties in any other neighborhood in the U.S., according to RCA’s survey of sub-markets where information from more than five property sales was available over the past two years. Miami Beach properties traded at an average cap rate of just 3.12 percent.

Miami is much smaller than many U.S. apartment markets—it is the 44th largest city in the country, behind Omaha, Neb. It’s a highly desirable sub-market and apartment properties here aren’t often up for sale. Only six properties sold in the neighborhood during the two years studied by RCA.

Investors paid cap rates averaging just 3.24 percent for the deluxe apartment assets on the Upper East Side in New York City, the largest metro area in the U.S. New York City neighborhoods dominate the list of the 25 sub-markets with the lowest cap rates, filling roughly one third of the spaces. These included Midtown East, with an average cap rate of 3.44 percent; Midtown West, with a cap rate of 4.11 percent; Downtown Manhattan, with an average cap rate of 4.13 percent; Midtown South, with a cap rate of 4.20 percent and Upper Manhattan, with a cap rate of 4.37 percent. The boroughs of Queens (4.42 percent) and Brooklyn (4.51 percent) also made the list.

The booming tech industry in the San Francisco Bay Area continues to draw investors to the city’s Central Business District (CBD), where investors accepted cap rates averaging just 3.63 percent. 

The San Diego metro area has less population than Boston, Seattle or other top apartment markets, but investors are paying top dollar for properties in the city’s Mission Bay and La Jolla neighborhoods, at an average cap rate of 3.98 percent. Other top San Diego neighborhoods include: San Diego’s CBD, with an average cap rate of 4.29 percent; Mission Valley, with an average cap rate of 4.57 percent and San Diego—North, with a cap rate of 4.74 percent.

Apartment sector experts consistently rank Los Angeles in the “top six” U.S. apartment markets. But the city does not appear on the list of areas where investors pay the most for property relative to income until the #10 spot. Investors paid cap rates averaging 4.17 percent for properties in Hollywood and Santa Monica, however. These investors bought 153 apartment properties over the two years studied by RCA.