Why Multifamily?

Out of all real estate property types, multifamily housing solutions are the most stable, recession-resistant, inflation hedging and likely to see long-term growth. Massive shortages in multifamily housing and all economic indicators point to a strong multifamily market for years ahead.

Compelling Fundamentals of Multifamily Investments

• Housing is necessity, not discretionary, spending. Unlike retail or other sectors, housing is a stable, essential asset.
• Housing is one of the largest asset classes in the world. For roughly a third of households in the U.S., 30% or more of household income being spent on housing costs.¹
• Higher housing prices and mortgage rates have pushed even more Americans toward the rental market, which has caused both demand and rents to rise even further in recent years.²
• Due to recent trends toward a “flight toward quality,” value-add opportunities provide growth potential from interior renovations and amenity enhancements.
• Nearly half of all U.S. apartments were built before 1980.³
• Demand for higher-quality apartments spiked 13.8% after the market cool down during the pandemic.⁴
• Due to the short lease term (compared to office, industrial or retail), apartment rents can quickly be adjusted as inflation increases. In periods of rapid inflation, such as the hyper-inflation environment in 2022, rents can rapidly be reset to the market.
• Available agency financing, such as from Fannie, Freddie and HUD, provides a competitive advantage for multifamily investments.
• In 2022, the national multifamily vacancy rate was 5.0%, well below long-term averages.⁵

Even during the Great Recession in 2008, multifamily housing performed well, provided it was not over-leveraged. Compare that to the thousands of commercial real estate (CRE) assets that were lost to lenders in the same period.

Capital Square is one of the nation’s leading sponsors of tax-advantaged real estate investments and an active developer and manager of multifamily communities. Our data-driven investment philosophies enable us to raise capital, buildings and expectations.

[1] “American Community Survey Public Use Microdata,” U.S. Census Bureau, 2021.

[2] “Consumer Expenditures in 2021,” U.S. Bureau of Labor Statistics, Report 1101, January 2023.

[3] “NMHC tabulations of 2021 American Community Survey microdata,” U.S. Census Bureau; National Multifamily Housing Council, Updated November 2022.

[4] “America’s Rental Housing 2022 report,” Harvard Joint Center for Housing Studies, January 21, 2022.

[5] “2022 Multifamily Market Outlook: Defying Gravity,” Fannie Mae, January 2022.