Apartment Developer Confidence Flat Despite Occupancy Strength

New NAHB survey highlights growing pressure on multifamily projects from rates and insurance costs.

Nina Dale
May 11, 2026

In partnership with

Good morning. Multifamily developers are holding steady in 2026, but higher costs and permitting delays are making projects tougher to finance. NAHB’s latest survey shows occupancy remains solid, especially for suburban garden-style apartments.

🎙️This Week on No Cap: Equinox’s Jeff Weinhaus breaks down the real estate strategy behind the luxury fitness empire, from the 70/30 Rule that picks new cities to the long game with landlords that's let Equinox scale without losing its soul.

CRE Trivia 🧠

Which Toronto-based developer, founded by the Reichmann brothers, built iconic projects like London’s Canary Wharf and Manhattan’s World Financial Center before collapsing into bankruptcy in 1992?

(Answer at the bottom of the newsletter)

IN PARTNERSHIP WITH ARBOR REALTY TRUST

An Innovative Financing Solution from Arbor and Freddie Mac

Arbor Realty Trust’s Proprietary Preferred Equity behind Freddie Mac Conventional Loans stands out because of how capital is deployed. Borrowers enjoy a streamlined experience that is frictionless and flexible.

✅ Capital drawn only when needed, not fully funded at close

✅ Boost leverage without the necessary cost or complexity

✅ Help preserve cash flow by avoiding interest on unused capital

Discover how this popular program and its phased contributions could add value to your next project.

*This is a paid advertisement. Please see the full disclosure at the bottom of the newsletter.

Market Snapshot

S&P 500

GSPC

7,398.93

Pct Chg:
+0.84%

FTSE NAREIT

FNER

845.09

Pct Chg:
+0.36%

10Y Treasury

TNX

4.364%

Pct Chg:
-0.03

SOFR

30-DAY AVERAGE

3.64%

Pct Chg:
-0.00

*Data as of 5/08/2026 market close.

Builder Confidence

Apartment Developer Confidence Flat Despite Occupancy Strength

Apartment developers are staying cautiously optimistic in 2026, though rising costs and tougher permitting are testing project feasibility across the country.

By the numbers: NAHB’s Multifamily Production Index (MPI) held at 44 in Q1 2026, indicating developer sentiment remains subdued. Meanwhile, the Multifamily Occupancy Index (MOI) fell 13 points year-over-year to 69 but stayed firmly positive.

Garden-style still leads: Demand continues to favor lower-density apartments. Garden-style sentiment slipped to 48, while mid/high-rise projects improved slightly to 35. Subsidized housing was the only segment above breakeven at 56, while condo sentiment dipped to 37.

Occupancy remains healthy: Apartment occupancy remains strong despite cooling from last year’s highs. Garden-style occupancy reached 71, mid/high-rise hit 59, and subsidized properties led at 80, all well above the positive 50-point benchmark.

Developers cite mounting headwinds: Builders cited permitting delays, high interest rates, rising insurance costs, and volatile material prices as major pressures on new development. In some markets, unsubsidized projects are also facing tougher approval hurdles.

A market stuck in neutral: Most developers aren’t seeing dramatic movement either way. About 60% of survey respondents said conditions are roughly the same as they were three months earlier, while 21% reported improvement and 19% said conditions worsened.

➥ THE TAKEAWAY

Building selectively: The multifamily market isn’t weakening — it’s becoming more selective. Developers who can navigate higher costs, tighter financing, and tougher approvals are likely to find the strongest opportunities in lower-density and subsidized housing.

A MESSAGE FROM COST SEGREGATION GUYS

Work With The Nation's Top Cost Segregation Firm

There is a reason sophisticated investors choose Cost Segregation Guys. In 2026, we remain the gold standard for engineering-based studies that unlock maximum depreciation. Our CPA-ready reports transform 39-year depreciation into immediate, audit-proof cash flow. While others provide basic spreadsheets, we deliver technical rigor that withstands IRS scrutiny and generates an unmatched 10:1 ROI.

Stop letting your capital stay trapped. Partner with the industry leader to accelerate your cash flow today.

*This is a paid advertisement. Please see the full disclosure at the bottom of the newsletter.

✍️ Editor’s Picks

Leasing slower than pro forma? Authentic's Multifamily Audit pinpoints the funnel stage killing absorption and delivers the fix plan. Money-back guarantee. Subscribers get 50% off. (sponsored)
Silver surge: Chiron Real Estate is entering the senior housing market with a $425M acquisition of three D.C.-area communities, capitalizing on rising demand and limited new supply.
Disclosure dilemma: The SEC’s proposal to allow semiannual reporting could reduce costs for REITs and encourage long-term investing, while raising concerns about transparency and delayed investor insights.
Connected capital: Covercy One’s new AI-powered platform promises to automate the most painful parts of fund management, while keeping banking, reporting, and investor relations under one roof. (sponsored)
Maturity crunch: More than $2.5B in CMBS loans face hard maturity in May 2026, with office properties driving the largest share of exposure as refinancing pressure builds across the sector.
Spread signal: Willy Walker says the widening gap between cap rates and Treasury yields signals a strong buying opportunity in CRE.

🏘️ MULTIFAMILY

Rent reset: U.S. multifamily rents edged up in April, but oversupply and soft demand continue to keep annual rent growth in negative territory across most major markets.
Migration magnet: Renters are increasingly flocking to Sun Belt markets like Texas and Florida, chasing lower housing costs, stronger job growth, and lifestyle-driven migration trends.
Freeze fight: New York’s Rent Guidelines Board advanced a proposal that could freeze rents for nearly 1M stabilized apartments, intensifying the clash between tenant advocates and landlords.
Fund fueled: S3 Capital closed a $1.3B multifamily lending fund that is expected to support more than $4B in construction loan originations.
Bay boom: Investors are aggressively buying San Francisco apartments as surging AI-driven demand and low vacancy rates push rents to their fastest growth in two decades.

🏭 Industrial

Cold alliance: Americold and EQT formed a $1.3B cold storage joint venture to expand a major North American temperature-controlled logistics platform.
Power pivot: QTS founder Chad Williams launched a new data center venture focused on gigawatt-scale campuses for AI and advanced manufacturing after his $3B exit from Blackstone-backed QTS.
Power struggle: Leadership turmoil and legal battles are clouding plans for Fermi America’s massive Texas data center campus, despite ambitions to build the world’s largest AI-powered hub.

🏬 RETAIL

Mall momentum: Macerich acquired Maryland’s Annapolis Mall for $272M as investor demand for high-performing retail centers continues to rebound.
Mall reclaimed: Providence Place, the mall featured in Netflix’s Secret Mall Apartment, is nearing a $133M sale as it exits receivership.
Puppy traffic: The Wharf’s annual Chihuahua race drew 40,000 visitors to the DC waterfront, turning a quirky dog event into a major foot-traffic driver for the mixed-use development.

🏢 OFFICE

Selective rebound: The office market is recovering unevenly, with demand returning mainly to high-end buildings in select cities while older offices continue to face high vacancy.
Refi windfall: Soloviev Group secured a $1.8B refinancing for 9 W. 57th St., allowing the owner to cash out more than $500M as the trophy office tower reaches over 91% occupancy.
Leasing rebound: Cushman & Wakefield and Marcus & Millichap posted strong revenue gains as office leasing rebounds and companies pull sublease space back into use.

🏨 HOSPITALITY

Resort refinance: The owners of the Diplomat Beach Resort secured a $600M refinancing after completing an $80M renovation and rebranding the Florida property as Signia by Hilton.
Global momentum: IHG posted strong first-quarter growth, surpassing 7,000 hotels worldwide as demand in the Americas and China offset weakness in the Middle East.

📈 CHART OF THE DAY

Manufacturing tenant demand has surged nearly 40% annually since 2019, driven by reshoring trends, federal incentives, and growing demand for advanced manufacturing space.

CRE Trivia (Answer)🧠

Olympia & York. At its peak, the firm controlled roughly $20B in real estate, briefly making it the world’s most valuable private real estate company.