NMHC 2026 Highlights: A Market Defined by Discipline and Opportunity

This year’s National Multifamily Housing Council (NMHC) conference reinforced a growing sense that the next phase of the real estate cycle is taking shape, marked by greater clarity, discipline and opportunity for experienced operators. While near-term fundamentals remain mixed across markets, the discussion emphasized that the combination of attractive pricing, abundant debt capital and a sharp decline in new multifamily starts is setting the stage for improved performance heading into 2026.

Across investing, development and management operations, the message was consistent: success will favor groups that understand submarket-level dynamics, apply thoughtful underwriting and execute differentiated strategies rather than relying on broad market assumptions.

The Capital Square team’s biggest NMHC takeaways:

• In the immediate post-COVID years (2021-2022), many firms underwrote real estate with a broad brush. Today, the industry has shifted toward more disciplined, asset-level underwriting, recognizing meaningful differences across product types, asset classes and market fundamentals that increasingly diverge by location.
• Regarding capital markets, transactions for premium assets continue to trade at relatively low cap rates, as investors pay up for quality and rely on net operating income (NOI) growth to drive returns.
• Debt capital remains abundant and is ready to be deployed.
  • Blackstone, for example, aims to double its funding activity in 2026 versus 2025.
  • Many investors facing challenges have been able to recapitalize and refinance their assets due to ample liquidity in debt markets, avoiding distressed sales.
• Not everyone is familiar with Opportunity Zones (OZs), which seems surprising given they have become a $100 billion+ industry, but those who are familiar recognize the value of pairing up land sellers with experienced OZ sponsors to drive business – with unique advantages in 2026. 
• Single-family rental (SFR) aggregators continue to expand their focus on Build for Rent (BFR).
  • As examples, Invitation Homes Inc. (INVH) acquired ResiBuilt Homes, LLC in January 2026 to internalize BFR construction.
  • In 2024, Blackrock took Tricon private and planned to complete a $1 billion single-family home development pipeline.
• To get new developments going in 2026, firms have to believe in a growth story or have a nuanced business plan that differentiates their development.
  • There will be compelling development opportunities for well-located sites without messy entitlements and landowners who are flexible or motivated.
• Absorption of apartment units in 2025 was the third highest annual absorption rate since 2000.
• Lower consumer confidence is affecting household formation, but a higher percentage of households are likely to continue renting. 
  • Significant rental demand is coming from Baby Boomers who are re-entering the housing market and young adults who are remaining renters for longer – both trends which affect demand for specific rental product types.
• Many tempering expectations linger around rent growth in 2026, but there’s consensus that the impact of rental unit absorption and the severe drop-off in multifamily construction starts over the last couple years will be felt sooner rather than later.
  • Some markets are much farther along than others in the process of absorbing new supply. Differences in market dynamics will become more apparent in 2026.  
  • For example, Atlanta was cited as being toward the end of the supply/absorption wave, while Nashville is still hovering around the peak of new deliveries.
• Concessions remain elevated across major markets as owners work to absorb new supply.
  • The process of absorbing new units and burning off the rental concessions needed to fill the new supply may still take significant time. Although the market feels more stable, operators and investors need to be patient as they wait for more material growth to return to the market.
• Renters have the ability to move for lower in-place rents, so it’s becoming increasingly important to engage the renter throughout the entire lifecycle and begin working the renewal immediately upon lease signing.
  • Data shows residents who feel a sense of belonging through events and multiple touchpoints throughout their resident journey are more likely to renew.
  • Although renewal offers cannot be generated more than 90 days prior to lease expiration, all renewal efforts should be made on a consistent basis. 
• Property performance has been muted over the last few years, so once improvements appear in rent growth and occupancy (maybe by the end of 2026), investors should react aggressively to take advantage of the pricing discounts to peak.
• Capital Square’s portfolio is poised to do well in the coming 12 months as our heavier concentrations are outside of the markets that are still fighting a glut of new supply.

Wider Economic Discussions:

• From a macroeconomic perspective, job growth is the big focus amongst economists along with the impact of immigration policy.
  • Across the country, there was little job growth in the second half of 2025, although performance of some sectors and in some markets was better than average. 
  • The low-hire/low-fire labor market is affecting recent college grads and white-collar employees disproportionately.
• Half of recent economic growth is attributed to data center construction, but data centers require relatively few staff to operate once complete. 
• Inflation is now settling in the mid to high 2% range, higher than we became accustomed to prior to COVID. 
• Shifting tariff and immigration policies have created uncertainty that affects business investments and R&D. 
• Platforms are increasingly incorporating artificial intelligence (AI) across portfolios to generate deeper insights into property management, asset management and investments.

Looking ahead, as supply pressures ease in many markets and capital markets remain supportive, opportunities are emerging to acquire and develop well-located assets at compelling bases, particularly for sponsors with flexible capital and operational expertise. Continued advances in technology and data-driven asset management further enhance the ability to drive performance through the cycle.

In this environment, Capital Square’s integrated platform — focused on disciplined investment, differentiated development and hands-on management — positions the firm well to capitalize on improving fundamentals and long-term value creation as the market normalizes.

Disclosure

Securities offered through WealthForge Securities, LLC, Member FINRA/SIPC. Capital Square and WealthForge Securities, LLC are separate entities. There are material risks associated with investing in DST properties and real estate securities including illiquidity, tenant vacancies, general market conditions and competition, lack of operating history, interest rate risks, the risk of new supply coming to market and softening rental rates, general risks of owning/operating commercial and multifamily properties, short-term leases associated with multifamily properties, financing risks, potential adverse tax consequences, general economic risks, development risks, long hold periods, and potential loss of the entire investment principal. Past performance is not a guarantee of future results. Potential cash flow, returns and appreciation are not guaranteed. IRC Section 1031 is a complex tax concept; consult your legal or tax professional regarding the specifics of your particular situation. This is not a solicitation or an offer to sell any securities. Please read the Private Placement Memorandum (PPM) in its entirety, paying careful attention to the risk section prior to investing. Private placements are speculative and illiquid. Diversification does not guarantee profits or protect against losses. FINRA Broker Check link: https://brokercheck.finra.org/.