Intelligent Investment

U.S. Multifamily Experiences Strong Investment Demand Amid Covid-19

March 15, 2021

By Neil Blake


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  • U.S. Multifamily remained the preferred investment sector in 2020, with its share of overall transaction activity reaching 36% - its largest share since 2001.
  • Rents overall declined by 4.2% in 2020. However, despite the ongoing pandemic, out of the 69 multifamily markets tracked by CBRE Econometric Advisors (EA), 45 recorded positive rent growth in 2020.
  • Fundamentals weakened the most in major metros, urban cores, and Class A units.
  • Major markets (San Francisco, New York) saw the largest rent declines, while the leading mid-tier markets (Riverside, Sacramento, Albuquerque, Tucson) saw rent growth exceeding 5%, surpassing pre-COVID levels.
  • The vacancy rate in urban core submarkets reached 6.1% in Q4 2020, its highest level since Q2 2010. Suburban submarket vacancy was relatively stable over this same period.
  • Similarly, vacancy rates for Class A jumped to 5.9% in Q4 2020, while Class B and C vacancy rates remained flat.
  • EA expects national multifamily fundamentals to begin to recover in mid- 2022, with secondary markets leading the recovery, followed by major metros.