One of the largest of the four commercial real estate asset classes, along with office, retail and industrial, multi-family has a growing share of institutional investor’s portfolios and on everyone’s mind even the individual investor looking to capitalize on trends that have been accelerated post pandemic.
Multifamily provides dozens or hundreds of individual rental agreements, minimizing vacancy exposure even during economic downturns making it a strong hedge against inflation. Multifamily also has predictable and available financing due to the promise of a reliable monthly cash flow from rental income. Many would-be first-time homeowners are being priced out of the market making multifamily a strong investment providing housing for those who can’t afford to buy single family houses.
Additionally, due to the lack of inventory there is an increase in rental demand and a lot of rental renewals. Lease renewals are ahead of new leases, renters are staying in their units. Multifamily has been top of mind for investors locally and globally, with a quarterly record reported from Fannie Mae of $63Billion in Q4 of 2020 in just multifamily transactions. This trend has been ongoing since the pandemic and there is a ton of money to be made by investors.
Multi-Family Trends 2022