What we see in our portfolio:
Consistent with the market data presented below we have modest rent growth, high retention rates on renewals, and high occupancy. We continue to run a vacancy rate around 2.5%, much better than industry average.
Insurance premiums are coming down on renewals and a new entrant to the market has been undercutting prices and taking market share providing some much needed relief on the largest multifamily cost driver over the last two years.
All the data points to much lower new apartment deliveries in 2026 and we are expecting rent growth to again keep pace with inflation. However, developers are chomping at the bit and have projects ready to go as soon as economically justified. Therefore I am not expecting anything close to the rent growth rates experienced in the mid to late 2010s.
Apartment building pricing continues to adjust to higher interest rates. We are starting to see neutral to slightly positive leverage (cap rates exceeding mortgage rates) on going in pro forma cap rates after years of negative leverage following the interest rate run up.
Given the insurance premium cost relief, modest rent growth, leveling supply, and positive leverage, I think we are at or near the bottom of the market in terms of multi-family asset pricing.
