US Apartment Occupancy Improves, 1st Time Since 2022

National apartment occupancy rates, which have been on a downward trend since early 2022, may finally be showing signs of stabilization.

US Apartment Occupancy Improves, 1st Time Since 2022

National apartment occupancy rates, which have been on a downward trend since early 2022, may finally be showing signs of stabilization.

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Good morning. U.S. apartment occupancy rates are up for the first time since early 2022. Meanwhile, the CRE outlook for the second half of 2024 remains mostly positive, with some caveats.

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*Data as of 5/06/2024 market close.


Nationwide, Apartment Occupancy Is Up For 1st Time in 2 Years

Inflection Point for Apartment Occupancy

After consistent declines since early 2022, apartment occupancy rates across the U.S. may be stabilizing, according to RealPage.

National apartment occupancy rates, which have been on a downward trend since early 2022, may finally be showing signs of stabilization.

Motivating metrics: RealPage data revealed that in April, the national average for apartment occupancy rose to 94.2%, up 10 bps MoM, a notable positive uptrend. All four U.S. regions—Northeast, Midwest, South, and West—enjoyed higher occupancy in April. The Midwest led annual rent gains with +2.7%, while the Northeast followed closely with +2.4%.

Positive demand trend: The positive change in occupancy reflects a surge in apartment demand that carried forward from a record-breaking Q1, during which over 100K units were absorbed on a net basis. This suggests a return to normal seasonal demand patterns, especially during late spring and early summer months, traditionally strong periods for apartment rentals.

Regional rent disparities: The Midwest leads rent growth, with Milwaukee up +3.5% YoY in April. Meanwhile, former multifamily hotspots like Austin face a -7.4% YoY rent drop. Other high-supply Sun Belt markets also experienced rent declines, while typically weak markets like San Antonio, Memphis, and Fort Worth saw occupancy rise 20-30 basis points but still remain down annually.


Big picture: Despite monthly rent growth across all regions, new supply is keeping rent increases modest. Asking rents rose just +0.2% month-over-month, leading to only +0.1% YoY growth due to Sun Belt rent declines. Expect subdued rent growth through 2024, especially in oversupplied markets.


2000 Duke Street Foreclosure Auction

The RealMarkets team is set to conduct a foreclosure auction at 2000 Duke Street, Alexandria, Virginia 22314, on Thursday, May 16, 2024, at 12 PM EST, starting with a minimum bid of $500,000.

  • 🏢 Opportunity to acquire a 164,407 SF office building in Old Town Alexandra’s Carlyle District, subject to a ground lease.

  • 🌟 Features: five floors, marble lobby, security, 296 parking spaces.

  • 👥 44% occupied, two full-floor tenants.

  • 📐 Zoning: CDD-1, Coordinated Development District

  • 📜 Ground Lease: Subject to an Amended and Restated Deed of Lease between Terra Funding – Duke, LLC and 2000 Duke, LLC.

  • 🔍 Due diligence: click here.

  • 📅 Tours available 5/9, 5/14, 5/16 and by appointment.

  • 📖 See Substitute Trustee’s Sale Notice for terms of sale.

✍️ Editor’s Picks

  • Big, bold bet: Todd Boehly’s Eldridge Acre Partners plans to bet $3B on US real estate via a JV with AECOM focused on distressed multifamily and student housing.

  • Spend money to make it: Newmark's (NMRK) Q1 revenue grew 4.9% to $546.5M, but the firm also reported a net loss of $29.8M due to boosted spending on talent acquisition.

  • Sign of the times: The national median income needed to afford a standard home in the U.S. just went up some more, from around $110K to $116K.

  • Another one bites the dust: Steward Health Care System, a tenant of Medical Properties Trust (MPW), files for Chapter 11 bankruptcy after facing the music.

  • Data-driven decisions: Aareon invests 100M euros in Stonal to expand its real estate data platform across the UK and all of Europe with the latest in AI technology.


  • A more affordable future: Dallas voters approved around $82M in bond funds to boost affordable housing production and address homelessness, with high approval rates.

  • Unveiling uneven housing: NYC housing production remains very uneven and is also expected to decline, according to a Department of City Planning report.

  • Lease-up realities: A recent national study reveals that 40K apartment units were absorbed in 1Q24, up 20% from 2023, impacting lease-up properties.

🏭 Industrial

  • Power move: Blackstone Real Estate Income Trust (BREIT) secured a $1.38B loan to refinance 142 industrial properties, signaling confidence in both industrial and retail.

  • Supply & demand dynamics: The Prologis Industrial Business Indicator Activity Index shows high demand for April, but low construction, hinting at future supply shortages.

  • Logistics expansion: Amazon (AMZN) closed on a 38.5KSF grocery center in San Francisco and is planning a 650KSF logistics hub in Showplace Square for $202M.

  • Silicon Valley spectacle: Trammell Crow Co. and CBRE Investment Management completed the 500KSF Cochrane Technology Center in Morgan Hill, CA.

  • Very logical refi: Fundrise just refinanced a 95% leased (mostly logistics tenants), 1.1MSF Southwest industrial portfolio with a $125M loan.


  • Retail revolution: Ripco Real Estate acquired Miami-based Acre, boosting its retail leasing footprint in South Florida with Acre’s lead brokers joining.

  • Retail ruin: On the flip side, Rue21, a teen-focused chain, will have to shutter 540 stores after its third bankruptcy filing due to pandemic-related economic challenges.

  • Retail reinvented: Brick-and-mortar stores are adapting to the dominance of e-commerce, with almost 42% of online orders now involving physical stores, up 15% from 2015.


  • The three towers: Plans for three Miami office towers in Brickell would add 2.8MSF, but the lack of new-to-market leases raises some viability concerns.

  • Landmark relisted: Young Woo relisted the Bronx General Post Office for over $70M, with potential redevelopments including a medical building and/or apartments.

  • Market meltdown: Hudson Pacific Properties (HPP) buys out a partner's stake in a 22-story tower in San Francisco’s Mid-Market for $43.5M, representing an 80% discount.


  • Facing the stockades: Blackwells Capital alleges Monty Bennett's self-dealing led to poor performance, urging Ashford Hospitality Trust (AHT) and Braemar (BHR) shareholders to reject him.


Why You Should Invest in Texas Multifamily in 2024

BV Capital believes that multifamily ground-up construction presents a significant opportunity for investors today, as they expect a supply-demand imbalance to materialize in the Texas multifamily market come 2025.

Given the increased demand and new multifamily construction starts currently stifled across the state, projects that manage to get off the ground now will be there to meet that demand — and even benefit from higher rental rates. 

Past performance is not indicative of future results.


Midyear, 2024 Shows Positive Signs, But Also Potential Challenges

The U.S. CRE outlook for the second half of 2024 looks optimistic, particularly for multifamily, industrial, and retail sectors. However, Al Brooks of JPMorgan Chase says rising interest rates and increasing office vacancies could be challenging.

Impact of vacancies: The national office vacancy rate surged to 19.6% in 4Q23, breaking records and raising concerns about future demand. Despite this uncertainty, prime office properties in active locations are still expected to outperform, highlighting the importance of evaluating risks and opportunities on a property-by-property basis.

Fighting fraud: With the high prevalence of payment fraud in 2022, it's crucial for CRE owners and operators to safeguard against fraud risks, especially in areas such as check and rent payment fraud. Training and teams on best practices for identifying and preventing cyberattacks are essential to protecting assets and operations.

Staying liquid: Given the current environment, investors should focus on conserving liquidity for better opportunities that should come with more stable interest rates. CRE investors can get the best bang for their cash through Treasury services and rent payment solutions to prepare in advance.

Sustainable workforce: Finally, a shift to workforce housing supply expansion is underway, with a focus on reasonable rents below market rates. New approaches aim to create housing opportunities for a broader income spectrum, promoting inclusivity.


Hurry up and wait: Despite a higher-for-longer interest rate environment and geopolitical uncertainties, CRE markets remain stable for now. However, industry experts are still advising caution when it comes to evaluating risks and opportunities amid evolving economic and geopolitical landscapes.


Apartment Construction in Raleigh Falls to Lowest Level in Two Years

In Raleigh, North Carolina, the number of apartments currently being built has reached its lowest point since early 2022, coinciding with rising vacancy rates and increased construction costs.

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