Intelligent Investment
Conviction Amid Complexity: Multifamily Market Outlook
May 15, 2025 7 Minute Watch
Summary
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Vice Chairman
Vice Chairman
Head of U.S. Investor Research
- Investor Conviction Remains Strong
Despite macroeconomic uncertainty, investor sentiment at CBRE’s Multifamily Summit was overwhelmingly positive. There is strong conviction in the positive long-term outlook for multifamily. - Policy and Tariffs Not a Major Concern
A live poll at the summit revealed that government policy and tariffs ranked lowest among investor concerns. These factors are not expected to materially impact capital deployment strategies. It could even be argued that trade barriers may cause fewer new properties to be developed, thereby supporting fundamentals. - Investment Volume Outlook
Three primary factors are expected to drive increased sales activity in H2 2025:
- Fund life maturities
- Loan maturities
- Operational fatigue
All of these factors point to a stronger second half. - Cap Rate Stability and Compression
Cap rates have remained remarkably stable despite interest rate volatility. This is another indication of multifamily investors’ strong conviction. Amid competitive bidding, some cap rate compression is evident for high-quality assets and prime locations. - Strategic Capital Deployment
Investors are very selective, focusing on assets in strong locations, with durable demand and solid rent growth potential. Groups with dry powder and a willingness to “play through the noise” should be rewarded.
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