This inaugural survey highlights continued appetite for multifamily investment as the market stabilizes
New York, NY – March 13, 2025 – Berkadia’s Inaugural Multifamily Investor Sentiment Survey reveals that investors are cautiously optimistic about the multifamily market for 2025. While expectations point to moderate growth and improving market conditions, investors still anticipate ongoing economic and operational challenges.
The survey reveals that most investors (65%) plan to moderately expand their multifamily portfolios in 2025, while fewer anticipate aggressive growth or maintaining current portfolios. A majority also expect rent growth to increase at a moderate pace, ranging from 1.0% to 3.0%.
When it comes to broader market expectations, half of the respondents predict the 10-Year Treasury yield will fall between 4.0% and 4.5% by the end of the year, while most anticipate a gradual improvement in the investment climate, with growing optimism heading into 2026.
While strong rental demand and improving market conditions are expected to support the multifamily sector, persistent headwinds continue to shape investment decisions. Investors cite elevated interest rates, rising insurance and labor costs, and concerns of potential oversupply as their key challenges today.
“Investors continue to express appetite for multifamily housing in 2025 and beyond,” said Berkadia Executive Vice President and Head of Production Ernie Katai. “Despite inflation and operational challenges, improving market conditions and compelling valuations are driving increased transaction activity. With fundamentals stabilizing and long-term demand remaining robust, the sector is primed for increased transaction activity.
Berkadia’s inaugural Multifamily Investor Sentiment Survey, conducted in January 2025, gathered insights from 240 clients to better understand their anticipated challenges and expectations for the multifamily sector in 2025, including market expectations, investment sentiment and portfolio strategies. Click here for the complete findings.
Additional highlights include:
Multifamily strength in the Southeast: 24% of investors expect the Southeast to be the most favored region for multifamily investment in 2025, followed by Texas and the Midwest.
Opportunities in Core-Plus and Value-Add strategies: Core-Plus (43%) and Value-Add (30%) strategies are most favored for risk-adjusted returns.
Apartment supply to outpace renter demand: 63% of investors believe renter demand for new apartments will outpace supply in 2025
Government-Sponsored Enterprises (GSEs) to be most active lending sources: The GSEs, Fannie Mae and Freddie Mac, are anticipated to be the most active lending sources in 2025, followed by Banks, Private Funds/Debt Funds, Life Companies, and HUD.
Exit cap rates to remain more of the same as going-in rates: When underwriting exit cap rates, most investors are keeping them the same as going in-rates, while others are underwriting 25-50 basis points higher.
Government regulation to play a neutral-to-positive role: 43% of investors expect government regulations to have a neutral impact on the multifamily sector, while 39% expect them to have a positive impact.
Operational challenges are top-of-mind: Investors cited a number of operational challenges that are expected to impact multifamily performance, led by insurance costs (34%), cost of labor (24%), maintenance and repairs (15%), and regulatory compliance (8%).
About the Multifamily Investor Sentiment Survey
Berkadia’s inaugural Multifamily Investor Sentiment Survey data, which collected in an online survey, facilitated by Berkadia in January of 2025, assesses anticipated CRE activity and opportunities for the year ahead. The survey received 240 responses, with a majority holding senior-level titles at private investor companies. A significant portion manages over $2.5 billion in assets, focusing primarily on the multifamily sector.
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