Just $5 billion in multifamily sales closed in the first quarter, according to Avison Young, the lowest amount since the second quarter of 2020, when COVID reduced sales volume to some $4 billion. That followed a decrease of 61 percent in 2023, to $119 billion, according to Matthews Real Estate Investment Services.

The movement is coming from a few spheres. Institutional investors and lenders both need to deploy capital, while some property owners that have delayed entering the market due to the high cost of capital and uncertain market are finding they have no choice.

But, are they making the right choices?
Throwing capital at a property is not always the right answer/
Underwriting is an art.
Poor underwriters
- Put the numbers into a Excel spreadsheet
- Add some increase for rents
- Reduce the staff expenses

And then they think they are going to make a great cash on cash return.
But they really don't spend enough time looking at:

1) Optimizing Rent for the location - can you do the increase and will it rent?
2) Increasing Occupancy - Giving the wrong concession can be a big mistake
3) Reducing Delinquency - Not necessarily evicting tenants behind, but working with them
4) Controlling Operational Expenses - especially when you take over a portfolio, there is a lot of "This is the way we have always done it." But too much change too quickly can create high staff turnover, and which further increases costs.

Is Multifamily Investment Finally Thawing?