Multifamily Transactions Drop to Pandemic-Era Lows

In Q1 2024, nearly 1,040 apartment properties were sold for $20.6 billion.

Multifamily Transactions Drop to Pandemic-Era Lows

In Q1 2024, nearly 1,040 apartment properties were sold for $20.6 billion.

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Good morning. The CRE Daily crew is back, refreshed and ready after a long MDW. In today’s issue: Interest rates and economic challenges have caused a sharp decline in multifamily investments. Plus, Starwood has further restricted redemption requests rather than selling off assets.

Today’s issue is brought to you by Opal Capital—invest in the future of hospitality.

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Property report

Multifamily Transactions Drop to Pandemic-Era Lows

Interest rates and economic challenges have led to a significant drop in multifamily deals.

Investment decline: According to RealPage data, investment in multifamily properties continued to fall in Q1 2024, hitting the lowest level since Q2 2020. The number of properties and the total dollar volume are both significantly down, roughly half of the 2019 quarterly average.

By the numbers: In Q1 2024, nearly 1,040 apartment properties were sold for $20.6 billion, as per MSCI Real Capital Analytics. This represents a 25% drop in sales volume and a 26% decrease in the number of properties compared to Q1 2023. This decline is stark when compared to the Q4 2021 peak, where around 5,400 properties were sold for over $166 billion.

Price and value: Average property prices also fell. At the peak, properties averaged $30.7 million, but in Q1 2024, the average dropped to $19.8 million. The average unit price was $190,184, the lowest in three years, down 6.5% from Q1 2023. This is still higher than the 2015-2019 average unit price of $151,000.

On the rise: Cap rates for apartment transactions rose by 50 basis points year-over-year to 5.7%, the highest in nearly eight years. Despite this increase, multifamily cap rates remain the lowest among major property types.


Why it matters: While transaction volumes have declined, multifamily construction hit an all-time high in 2023, with expectations for 2024 indicating a 50% increase in deliveries. This surge in construction requires more capital and has affected occupancy rates and rents in existing buildings. The decrease in sales volume is likely due to investors channeling more funds into these new developments.


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✍️ Editor’s Picks

  • Withdrawal: Starwood Real Estate Income Trust, facing a cash crunch, has further limited redemption requests instead of selling assets into a discounted market.

  • Funding help: CVS is seeking private equity support for expanding Oak Street Health, which it acquired last year for $10.6 billion, to fund new clinics as part of Oak Street's growth.

  • “Home Alone”: The Winnetka house featured in the 1990 holiday classic could be yours for a cool $5.3M. This is the second time it’s been on the market since the movie debuted.

  • Losing control: Opal Holdings lost Burnett Plaza in Fort Worth to Pinnacle Bank, which also accuses founder Shaya Prager of concealing ownership to secure an $83 million loan.


  • Housing bill: New Arizona legislation allows developers to bypass local zoning to build multifamily homes and backyard granny flats near downtowns under two bipartisan bills.

  • Gowanus project: Rabsky Group secured a $286M construction loan from G4 Capital for its 604-unit multifamily building, capitalizing on the industrial neighborhood's 2021 rezoning.

  • Cooling down: Nashville rental rates surged during the pandemic, but the boom is over, and property owners are now struggling to fill vacancies, according to a Redfin analyst.

  • Hersch Tower: Joel Friedman placed the tallest tower in Union County into bankruptcy last week, halting a foreclosure auction for the unfinished luxury apartment conversion project.

  • Salary gap: A new survey shows groundskeepers and porters at apartment properties have the lowest median base salary of $32,900 and the lowest average bonus of 4.2% in multifamily.

  • Ribbon cutting: Dominium is set to open its first South Carolina affordable housing development today, Haven at Congaree Pointe, a 198-unit senior community in Columbia.

🏭 Industrial

  • Charlotte: LM Real Estate Partners has acquired a 1.4 MSF Premier Distribution Center for $97 million, marking the largest industrial sale of the year in Charlotte’s industrial market.

  • Record expansion: Eli Lilly announced a $5.3B expansion of its Indiana plant to boost production of its weight-loss and diabetes treatments, its largest manufacturing investment to date.

  • New construction: Philadelphia is poised to become a leading manufacturing hub, with ongoing and upcoming construction placing it among the top U.S. metros for new activity.


  • Redevelopment: The Quay shopping center in Fort Lauderdale will be redeveloped by its new owners, who plan to add 361 residential units and 12,000 SF of retail and restaurant space.

  • Consumer shift: Red Lobster's abrupt Chapter 11 bankruptcy reflects a broader trend of major casual dining chains scaling back amid evolving consumer demands.

  • Discount demand: Despite closing stores, Family Dollar maintained steady foot traffic in 2024, highlighting the ongoing demand for value-priced goods, according to PlacerAI.


  • Back to work: HSBC opened its new US headquarters at The Spiral in NYC's Hudson Yards, doubling employee attendance to 80% since February.

  • Heavy loss: After seizing an Oak Brook office complex due to a distressed $58 million loan, Heitman has found a way to exit the property, resulting in a $12 million loss on its debt.

  • Chicago foreclosure: Ivor Braka’s historic building at 332 South Michigan Avenue, opposite the Art Institute of Chicago, is facing foreclosure by LNR Partners over a $32.5 million loan.

  • Relocation: Walmart is asking 1,266 employees from its Dallas technology innovation hub to relocate to other U.S. markets as part of its plan for remote employees to work from primary offices.


  • High demand: The Reuben Brothers are planning a $2B oceanfront luxury resort in Puerto Rico called Esencia, featuring hotels by Aman, Mandarin Oriental, and Rosewood, with financing from JPMorgan Chase.

  • Allen Hotel: Lenders have foreclosed on a partially complete Staybridge Suites in Allen after its owner defaulted on a $9.2M loan, with the 81K SF property set for auction on June 4 in Collin County.


According to RCLCO, multifamily developers can command a rent premium by incorporating upscale grocery stores like Whole Foods and Trader Joe's into apartment projects, with rental rates averaging 6% and 5.6% higher, respectively.

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