- Median multifamily NOI growth slowed to 1.8% in 2025 from 3.4% a year earlier, per Trepp.
- Total operating expense growth eased to 3.7%, led by property insurance, whose median increase fell to 2.7% from 10.9%.
- Expenses still grew faster than revenue, giving lenders less cushion for properties that must refinance at higher debt costs.
Apartment cost pressures eased in 2025, but the relief did not reach the bottom line. Median operating expense growth slowed, yet it still ran ahead of revenue growth. As a result, median NOI growth weakened, per Trepp.
Get Smarter about what matters in CRE
Stay ahead of trends in commercial real estate with CRE Daily – the free newsletter delivering everything you need to start your day in just 5-minutes
Costs Cooled but Not Enough
Trepp’s data show a broad slowdown in cost growth. Median total operating expense growth fell to 3.7% in 2025 from 5.1% in 2024. Property insurance drove much of the improvement, with its median increase dropping to 2.7% from 10.9%. Revenue growth also cooled, easing to 2.8% from 4.2%. Median NOI growth slipped to 1.8% from 3.4%. The expense median still sat about 0.9 points above the revenue median.
The Details
Not every line moved the same way. Median utilities growth accelerated to 6.7% from 3.9%, while repairs and maintenance held near 3.1%. Advertising and marketing eased to 4.5%. Over five years from 2021 to 2025, the compounded medians tell the same story. They imply cumulative growth of 32.4% for operating expenses, 26.6% for revenues, and 21.9% for NOI.
Source: Trepp
Property insurance was the fastest-growing major expense, implying a 57.9% five-year rise and a 9.6% CAGR.
Geography Was Far From Uniform
Location shaped the results. Across all nine US Census divisions, the implied operating-expense measure topped the revenue measure. Among seven metros Trepp highlighted, implied NOI growth ranged from 3.4% in San Francisco to 33.9% in Miami. Miami also posted the highest implied revenue at 39.4% and an insurance measure of 101.9%. That means its compounded medians slightly more than doubled. San Diego and Phoenix both cleared 25% implied NOI. Trepp cautions that each figure uses a different property set, so the numbers describe direction, not a same-property bridge.
Why It Matters
For lenders and CMBS investors, the key question is how much revenue growth reached NOI. Softer NOI growth offers less support for properties refinancing at higher debt costs.
The pressure echoes broader concerns that rising expenses can squeeze multifamily NOI when rent growth cannot keep pace. A higher increase in expenses than revenues points to weaker operating momentum across the samples.
Trepp notes the medians do not show whether any single property covered its debt payments. That still depends on starting income, loan balance, rate, and amortization.
What’s Next
Trepp calls the 2025 slowdown constructive but not yet a turning point. One year of easing costs does not confirm a durable shift. A stronger picture would need revenue growth to outpace expense growth for a sustained stretch. The next round of annual property financials will show whether the slowdown holds. Until then, property-level analysis remains necessary to judge margins, debt service coverage, and refinancing risk.
