Two Multifamily Trends to Watch in 2024

2023 saw a modest 1.6% increase in multifamily rental asking rents nationally, but upcoming trends signal a notable shift in the market, says Yardi Matrix.

Two Multifamily Trends to Watch in 2024

2023 saw a modest 1.6% increase in multifamily rental asking rents nationally, but upcoming trends signal a notable shift in the market, says Yardi Matrix.

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Good morning. The rent growth story is expected to be different this year, with Yardi Matrix forecasting two main shifts in this market. Plus, the US CRE market has been in turmoil since the pandemic. But some lenders are only just beginning to feel the pain.

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Two Multifamily Rent Growth Patterns to Watch in 2024

2023 saw a modest 1.6% increase in multifamily rental asking rents nationally, but upcoming trends signal a notable shift in the market, says Yardi Matrix.

Increased supply: The multifamily rental market is bracing for a unique challenge as record-high available supply is set to temper rent appreciation. This surge in availability, primarily in areas that thrived during the pandemic, might lead to negative growth in some markets. Despite higher absorption rates, the market could take more than a year to fully integrate this new supply.

Rent gap: Another trend is the ongoing reduction in the difference between in-place rents and asking rents. With asking rents traditionally acting as a precursor to in-place rents, the current gap is predicted to shrink further. This trend signals a shift towards stabilization in the market, moving away from the larger rent increases seen in previous years.

Regional shift: Regional trends continue to play a significant role. In 2023, Western and Southwestern regions, once booming, faced downturns, while mid-sized cities near major universities showed impressive growth. Looking ahead, a subdued 0.8% growth in asking rents is expected for 2024 across most markets. After the current oversupply is absorbed, a return to the typical annual growth rate of 3-4% in asking rents is anticipated.


Path to recovery: 2023 was a year of adjustment in the multifamily rental market, marked by the absorption of excess supply and the stabilization of rent growth. This year promises opportunities for investors and renters alike as the market seeks a new equilibrium between supply and demand.


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✍️ Editor’s Picks

  • Keeping rates steady: Fed Chair Jerome Powell has decided to keep interest rates steady for now but hints at possible rate cuts due to declining inflation. Gotta love the guy’s communication.

  • Redemption satisfaction: Blackstone Real Estate Investment Trust has fulfilled 88% of redemption requests, clearing $1.1B of the $1.3B in requests it received in January.

  • Hyde Landing: NVR plans to develop the former Washington Executive Airport into a mixed-use neighborhood with 1,288 residences, commercial space, parks, and a solar energy farm.

  • Building concerns: 90% of builders in 2023 had concerns over high interest rates, while 77% expect it to be an issue in 2024. Rising inflation and labor availability were also serious problems.

  • Bargain brawlers: Pimco (ALIZY) warns of cracks in the booming private credit market and stands ready to use aggressive tactics for bargains.


  • Wheelin’ and dealin’: Kushner Companies sold a five-building East Village portfolio for $41M to Penn South Capital.

  • The perfect oasis: Fein Communities plans to construct Echo Lake, a 326-unit apartment complex in Houston's expanding 2K-acre City Place development.

  • Still renting: National median monthly rent growth fell 0.3% in January, while YoY rent growth slid -1.0%. The national median apartment rent is now $1,373.

🏭 Industrial

  • From trash to solar: Highline Commerce, Pvilion, and Citibin sign 4-year leases for flexible industrial space at Industry City in Brooklyn.

  • Logistics gold rush: Boston-based PE real estate firm Cabot Properties closed its largest fund to date, Value Fund VII, with $1.57B for acquiring and developing logistics assets globally.

  • In the name of industry: Unilev Capital acquires an $18.2M, 141.5KSF industrial portfolio in Norcross, GA, with 86% occupancy.


  • Nashville Yards: Construction is underway for Nashville Yards, a 2.5MSF entertainment district with residential towers, office space, and retail.

  • Walmart resurgence: Walmart (WMT) plans to build or expand over 150 stores, remodel 650 stores, and develop a coast-to-coast network of EV charging stations by 2029.


  • Still WeWorking: WeWork maintains most of its seven leases in the Dallas-Fort Worth area, despite financial troubles and bankruptcy.

  • Corporate to cozy: Wayne, NJ faces challenges in transforming former corporate HQs into multifamily housing, with three projects facing snags on affordable housing requirements.

  • Frozen market: Manhattan office leasing activity dropped in January, with availability at an all-time high for the second consecutive month.


Global Banks Hit by $560 Billion Real Estate Challenge

The commercial real estate lending market is facing a significant challenge, with major banks from New York to Tokyo grappling with the fallout of declining property values and looming debt maturities.

What happened? Banks are grappling with an impending $560 billion in commercial real estate maturities by 2025, with regional banks particularly vulnerable due to their significant exposure to the sector. The decline in commercial property values, exacerbated by the shift to remote work and rising interest rates, has heightened the risk of loan defaults.

Growing uncertainty: NYCB's drastic measures, including dividend cuts and reserve accumulation, have led to a 38% stock decline. Similarly, Aozora Bank warned of US property losses, causing its shares to tumble by over 20%. This turmoil has rippled globally, affecting European and Asian markets and highlighting the universal impact of the US real estate sector's instability.

The dilemma: Office spaces have been in turmoil since the pandemic's onset, with transactions declining amidst valuation uncertainties. With looming debt maturities and possible interest rate cuts by the Federal Reserve, the market is expected to see more clarity in property valuations, potentially revealing significant declines in value. An example is the Aon Center in Los Angeles, which recently sold for 45% less than its price in 2014.

Rent regulation: The multifamily market, particularly in New York, faces its own set of challenges. New York Community Bancorp has a substantial portion of its loans in rent-regulated apartment buildings, making them susceptible to the 2019 New York state rent laws. These laws restrict rent increases, thereby impacting the bank's loan security. The delinquency rates in rent-stabilized buildings in New York City have tripled compared to other apartments, highlighting the sector's vulnerability.


Pressure cooker: Banks face increasing pressure to reduce their CRE holdings amidst market uncertainties. The Canadian Imperial Bank of Commerce's actions in selling off distressed US office property loans indicate a growing trend despite these loans comprising a minor portion of their assets. With looming defaults expected to surpass current delinquencies, the banking sector braces for significant challenges ahead, regardless of potential interest rate declines.


In the past year, originators of commercial mortgage-backed securities (CMBS) have become more selective in financing office buildings, showing a marked change from their approach in 2022. This trend is highlighted by recent data from CoStar and Morningstar Credit Analytics.

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