Price Per Unit

Price per unit is to multifamily what price per square foot is to office and industrial. It provides a quick, standardized way to compare the relative pricing of apartment properties regardless of their total size. A 100-unit complex at $120,000 per unit is immediately comparable to a 30-unit building at $135,000 per unit, even though their total prices are very different.

This metric is heavily influenced by unit mix, unit size, finish quality, location, and vintage. A property with predominantly one-bedroom units will typically have a lower price per unit than one with three-bedroom units, all else being equal. Similarly, a newly constructed luxury apartment will command a much higher price per unit than a 1970s value-add property. For this reason, investors often look at price per unit alongside price per square foot to control for differences in average unit size.

Price per unit is also useful for estimating replacement cost. If new construction in a market costs $200,000 per unit to build, and existing properties trade at $130,000 per unit, there is a significant discount to replacement cost that may limit new supply (making existing assets more valuable) or signal opportunity for value-add renovation. Lenders also reference price per unit when underwriting multifamily loans, as it provides a quick sanity check against market norms.