As the Midwest multifamily segment saw a record-setting year with deliveries in 2017, the St. Louis market wasn’t too far behind its own transaction record.

The St. Louis multifamily segment recorded $715 million in transactions among 67 deals, missing 2016’s record of $791 million. The two biggest deals here were the $59.5 million Residences at Streets of St. Charles and the $58.4 million Alinea at Town & Country apartment development in Des Peres.

“The Midwest has very stable and strong fundamentals,” said CBRE Executive Vice President Matt Bukhshtaber. “There are a lot of out-of-town buyers looking to place capital … (as) there’s a little better yield in the Midwest than on the coasts.”

In general, investors see a 150 basis-point, or 1.5 percent, return on investment in the Midwest over the West or East coasts, he said, though that can vary depending on a specific market and development.

Out of the 32,845 units delivered in 2017 across the Midwest, St. Louis ranked No. 6 out of 10 in multifamily completions, with 2,312 units, according to the CBRE report. Chicago was No.1 with nearly 7,500 delivered. The Midwest vacancy rate averaged 5.3 percent in the fourth quarter, lower than St. Louis’ 7.3 percent. Bukshtaber said that difference was due to a few projects that are just now opening up for leasing.

St. Louis also had a 1.5 percent increase in asking rent per unit from 2015 to 2017, though Columbus, Ohio, led the region with 7.1 percent.

Who’s driving this demand? In part, millennials. Student debt, love of amenities and freedom from a long-term commitment are some of the driving forces for millennials choosing multifamily developments over homeownership, according to Intelica CRE in its white paper on millennials’ impact on real estate.

So far, 2018 has yet to see any mega deals that defined the past two years. But Bukshtaber said there’s been nine multifamily deals completed that total $69 million so far this year.