Daily Top 5

Multifamily Investors Plan Growth Despite Difficult Deal Market

Article originally posted on Globe St. on September 14, 2026

Multifamily investors are entering the second half of 2026 confronting disappointing property performance, difficult deal execution and continued market volatility. Despite those immediate pressures, most are still planning to grow their portfolios and expect the investment climate to improve beginning next year.

That contrast runs through Berkadia’s 2026 Mid-Year Multifamily Pulse Survey, which gathered responses from more than 100 industry participants, primarily principals and directors at private investment companies.

More than half of respondents (52%) said the first half performed worse than expected, while 43% said results were roughly in line with their expectations. Only 5% reported better-than-expected performance.

Volatility has also weighed on sentiment, with 61% saying it had made their investment outlook for the second half somewhat or decidedly negative. Another 26% said their outlook was unchanged.

Expansion Plans

Those concerns have not prompted a broad retreat from multifamily. Eighty-two percent of respondents plan to expand their portfolios, including 70% expecting moderate and 12% planning aggressive growth. Fourteen percent intend to maintain their current holdings, while only 4% plan to reduce their portfolios or exit the market.

The appetite for growth comes as acquisitions remain difficult to justify. Respondents identified finding deals that work as their greatest challenge, followed by interest rates, securing capital and oversupply in some markets.

Deal execution is highly selective. Thirty-two percent said only certain transactions are getting completed while many are stalling. Another 22% described transactions as noticeably more complex and difficult to execute and 21% said deals have become somewhat more challenging but are still getting done.

Fifty-five percent said they had placed planned sales on hold because of volatility. When bringing a property to market, only 6% were very confident it would trade, compared with 41% who were somewhat confident and 37% who were not very confident.

Expectations for improvement are further out. Only 15% anticipate a better multifamily investment climate during the second half of 2026, but that share rises to 60% for the first half of 2027 and 79% for the second half.

Investors nevertheless remain conservative in their underwriting. Nearly half assume exit cap rates will expand by 25 to 50 basis points over their going-in rates. Rent expectations are similarly restrained, with 73% expecting growth of no more than 2.5% during the next 18 months, including 39% anticipating between zero and 1%.

Midwest is Tops

Regionally, respondents ranked the Midwest as the most attractive area for multifamily investment during the second half, followed by the Southeast and Northeast/Mid-Atlantic.

Berkadia said the preferences generally align with recent rent performance. RealPage data cited in the report showed Midwest effective rents rising 4.6% year-over-year through the first quarter, compared with 3.2% in the Northeast and a 0.1% decline across the broader South.

In heavily supplied markets, meanwhile, 63% favored using concessions to protect occupancy rather than cutting base asking rents.

Back to News