Active Multifamily Buyers 2026
Curious if anyone has heard a compelling investment thesis from groups that are actually buying right now. Feels like most acquisitions guys are just pretending to be busy and mostly complaining (myself included).
I’ve been in multifamily since the GFC, so I feel like I should have better answers, but I genuinely don’t know how to describe this market. Dislocated? Stagnant? Existential? Transaction volume is miniscule, fundraising seems brutal, and even the “good” markets have regulatory risk or supply problems holding them back. A friend at a mega shop told me their current fundraise may end up at half the size of the predecessor due to underwhelmed allocators.
Meanwhile, the multifamily value proposition feels broken. We’re living through inflation, yet rent growth is somehow the one thing that didn’t get the memo. NOI growth is anemic, core feels overpriced, core plus feels stagnant, value-add feels like the loser in a game of hot potato. I recently asked a top Sun Belt broker if a single deal he’d sold in the last three years would fetch a higher price today: “probably not.”
So how exactly are deals supposed to pencil? That same broker is still modeling 3% rent growth in their OMs and guiding to negative leverage. I doubt even half of their deals are trading and most that do are below guidance.
It seems like owners of decent assets can extend and pretend forever. What’s the catalyst that changes that?
Maybe I’m just venting. Feeling restless I’m looking at other opportunities, but it seems like the only jobs right now are asset management roles that look more like portfolio janitors. Almost no open acquisition roles with any credible groups - hearing of more firing than hiring.
I still see deals getting announced, though, so groups must be underwriting something other than vibes. Who’s actually leaning in while everyone else is fearful? Is anyone making good buys right now with fresh equity or is it all just 1031s and recycled capital making the market?
The multifamily market in 2026 appears to be grappling with significant challenges, as highlighted in your observations. Based on the most helpful WSO content, here are some insights into the current dynamics and potential strategies for active buyers:
Market Dislocation and Pricing Adjustments:
Demographic and Demand Trends:
Challenges in Rent Growth and NOI:
Catalysts for Change:
Active Buyers and Strategies:
Job Market Realities:
In summary, while the multifamily market faces headwinds, opportunities exist for buyers with a clear thesis, a willingness to navigate short-term risks, and a focus on long-term fundamentals. Groups leaning in now are likely those with strong capital backing, a strategic focus on distressed or niche opportunities, and the ability to underwrite conservatively in a volatile environment.
Sources: The market is turning rapidly..., We might be at the bottom in Multifamily (MF), We might be at the bottom in Multifamily (MF), The market is turning rapidly...
lol, don’t depress the 21-year-olds here. You should have doom and gloomed AI underwriting too.
Agree with literally everything you've said. I'm generally pencils down on multi for those exact reasons. The only tailwind I think is supply/demand and discount to replacement cost in some markets. Have to be investing in a supply constrained market with no new construction on the horizon where there hopefully is little or some rent growth that might turn into more. Ideally with pop and job growth. Regardless if I was an LP that needs to hit value add and even core plus returns, just don't see it happening anytime soon in multi. Don't even get me started on development....
I can only comment on the Southeast because that's all I know. I don't think buying is very attractive right now because in-place cap rates are sub 5, vanilla debt costs are mid 5s, and you still have to pay AM and CapEx on top of that. Taking a hypothetical deal, if you buy it for a 4.75% in-place cap rate / 4.65% return on cost, you are looking at a 3% cash on cash yield. Even if you burn off concessions and tighten occupancy by 200 bps, you are staring down a whopping 5.25% cap rate / 5.15% return on cost, and just under 4% cash on cash. And then if you want to get north of a 5% cash on cash from there you need to assume 10-12% cumulative rent growth. You have to assume a lot just to make 5% current. That's not a super attractive bet IMO.
For years, people have been talking about the Sun Belt supply drop off / recovery story but so far they've been wrong. I don't think they are totally wrong - starts and pipelines are clearly falling, but they overestimated how quickly supply would fall while simultaneously overestimating demand (Net absorption is not demand it's quantity demanded). Some markets (Charleston in particular) are showing signs of recovery and look to be back on the path to normalized rent growth this year. But it's an outlier case. So many other markets - Orlando, Tampa, Jacksonville, Nashville, Atlanta, Charlotte, and Raleigh, are still anemic and probably will be until 2027 (and I think some really tough markets like Charlotte, Nashville, Orlando, and Tampa will have to wait until 2028 - trademarking that slogan). We will see in the next month whether these markets are going to tank again in 2026. Since 2022, they've all turned over and died in the last weeks of June to first half of July. We're already seeing some slowing momentum which is not encouraging.
The only markets where it makes sense to buy are the smaller markets that didn't receive much supply or have had meaningful supply drop offs. And that's pretty small buy box which makes deploying capital at scale challenging.
And you might ask yourself - does building make sense? And the answer there is no. I can buy a 2023-25 vintage lease up that is effectively the same deal from a bricks and sticks standpoint as new construction for either the same cost or a lower cost than it is to build. Why in the world would I take on construction risk, more expensive cost of capital, and forgo 3 years of cash flow all to own effectively the same deal? Doesn't make much sense to me.
Just wait for in-place cap rates to ascend to LTN, MTN, HTN, Chad-Lite, Chad, or True Adam
Truly over for the 4 cap-cels
This checks out from what I’ve seen. my companies bought a significant portfolio between 2023 and now and everything we have bought is underperforming. The supply/demand story about deliveries falling off is just not materializing. It is looking like we oversupplied the market or are at near equilibrium as 22-25 deliveries absorb. Demand is materially lower than most people (including myself) expected.
My view today is until you see concessions burn off completely for stabilized units you won’t see material rent growth, appreciation in value or new development really making sense.
There is so much phantom supply that I’m fearful we won’t see a lot sustained rent growth.
What do you mean by phantom supply?
It is a weird market. On one hand, in the past two weeks, I know of few deals in the SE region where debt is coming due and the equity is wiped out and likely going back to the lender.
One the other hand, I know of a group that is ready to go shopping in the Sunbelt and buying brand new property with massive concessions and significant discounts to replacement costs/current basis. They have long term, patient equity. I think there is a case to be made for this assuming you buy into the absorption trends and lack of new supply coming on-line. (We will ignore AI taking everyone's job in the near term.)
Other than that, it feels like a lot of defensive maneuvers for those who can and lenders done kicking the can down the road. Probably 6-12 months of pain before things start turning around ... well, that's before borrower's start seeing what the real cap rates are for that 1970 fully renovated building in Phoenix. I'm sure there's a syndicator out there with retail equity just waiting to pounce with the newest debt fund loan. #passiveincome
There’s just too many stupid people working in this industry. It’s just straight morons all the way down.
I don’t know that it’s so much stupid people as much as I need to do deals to makes fees to keep the lights (probably still could be considered stupidity).
My company is still looking at multifamily in select markets, most notably SF. We're currently underwriting a low 4's going-in, stabilizing to a low 5 in Y3, and selling at a high 4 after a 10 year hold. Market rent growth assumed at a ~3.5% CAGR. It's a thin deal but we're leaning into the SF recovery story given the 10-30% tradeouts that have been happening here.
Trended yr 3 low 5 or un-trended?
.
That strategy makes sense if you have equity, but not sexy enough to raise new money.
I have no idea how to raise new money for multi right now…. Most LPs are overallocated or underwater on their current deals.
Bingo. Impossible to raise money for it
We bought 350m in past 12 months in the mountain west, most were loan assumptions. In place 5s with strong cash on cash yields. Some of my deals from 2024 were mid-high 5 caps in place and now are realized mid 6’s from purely operational value add and underpriced rents (these were in low supply sunbelt and northeast tertiary markets).
What exit cap did you UW? Sure it’s nice to get the better cash flow but the bulk of the return I would say comes from the residual
5.5 in northeast (2020 vintage), 6.0 in southeast (2000 vintage)
Some groups, particularly institutional funds, can’t just sit on their hands forever. Many multifamily firms have relatively new funds, and say you have $1b and a 3-4 year investment window, you need to put out $750-$1b in acquisitions per year if it’s levered to 65%. When that’s the case, you buy the best deals you can find & win. Your fund investors aren’t allocating to you to return their capital because of lack of investment.
As a multi acq guy I haven't done a deal in 3 years. I was at a firm that downsized by 75% due to a poor performing fund (thankfully not because of the deals I did) and then landed at a shop trying to cosplay as a real firm - they wanted me to tell brokers we had equity (when we had $0) to try and tie up deals they could go raise on. I've now been out of a job for 3+ months and the job opportunities at the Director/SVP/MD level are scant.
To stay busy, I'm doing a small deal in a tertiary market with friends and family equity, and the property is getting 8-9% on renewals and is 100% occupied. This market has very little supply but a very stable local economy, and the in-place cap is 8.1%. It won't have the exit liquidity like a deal in a primary market, but at a 11% cash on cash it is certainly less of a concern.
I've spoken with two MDs for two major multi firms over the last couple of weeks as I've been trying to network. One said it is the weirdest market he's ever seen (weirded than the GFC) and that he can't understand how some of these deals are being capitalized. This is typically a very active buyer, but doesn't see enough data in their current portfolio to be able to lean in on deals like they have in the past. Rather ride it out.
The other continues to do deals - ramped up in 2025 and even more in 2026. Has institutional equity at their doorstep to place capital. This is a large, fully-vertically integrated platform with a large third-party management platform. Institutional equity sees them as one of the safest GP bets in the country. This GP believes organic rent growth will come roaring back with a vengeance in 2027 and beyond which will make their buys very lucrative in 2030.
It was interesting hearing two completely different perspectives from a couple of guys who've been in the industry a long time and both have done several billions in deals over their careers.
Stating the obvious here - and maybe it goes without saying because I think it's only alluded to once in this thread so far - but interest rates were so low for so long (too low for too long) that even a 3-4 year frozen period won't undo its effects. Everyone's basis is so crazy high that unless lenders force some kind of cram down on everyone (no more extend and pretend), forcing true price true discovery between buyers/sellers, we're stuck here forever. Namaste.
This will be a strong vintage for whoever is discerning and has discretionary equity to deploy. We’ve deployed ~$400MM of equity across 15-20 transactions in the last 48 months into strong performers and are unfortunately starting to run dry (and the prospect of raising additional institutional equity isn’t great for now).
Deals are harder to find today, but there are plenty of distressed and/or motivated sellers out there that need to sell.
Multi is just not a good product type right now and won’t be for a while in most markets
The risk adjusted returns make no sense
The only groups I see buying are one using stupid money either foriegn or raising private capital from idiots
But NOI growth is going to be weak for a while as rents aren’t going to run and opex is going to continue to grow
I know groups who have been actively buying and literally it’s only because they have stupid capital
At some point that stops
Why better places to put your money in
We’re not finding enough of a play on an institutional level, so we are buying sub-institutional mom and pop assets where we can get 150+ bps in un-trended lift for low hanging fruit (mark to market, RUBS implementation etc.)
As an aspiring CRE analyst this is very disheartening to see. Im currently a junior in college. Do any industry professionals have advice for me considering the viability and prosperity of this career path?
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