Welcome back to What's Hot & What's Not in CRE — your daily pulse on commercial real estate in America.Today we're diving into multifamily asset classes — Class A, B, or C: which looks hottest for 2026?🔥 What's Hot — Class B Wins:

• Higher Cap Rates — 25-50 bps above Class A; value-add deals near 7%
• Affordability Crisis Driving Demand — Middle-income renters (teachers, nurses, essential workers) staying in workforce housing
• Recession Resilient — Outperforms in 73% of past recessions; renters trade down from Class A to B
• Tightest Vacancy — 3.1% in 2022, 6.1% decade average (500 bps tighter than Class A historically)
• Value-Add Upside — Energy efficiency, security tech, cosmetic upgrades drive 15-25% utility savings and rent premiums

• Class A Luxury Struggling — Vacancy above 10%; 2-3 months free rent concessions common
• Class C Limited Upside — Can reposition to "B+" but rent growth ceiling exists
• Sun Belt Oversupply — Austin, Phoenix, Dallas new Class A competing hard; Class B more insulated

❄️ What's Not:Takeaway: Class B multifamily is where smart money is focusing for 2026.Thanks for tuning in.

See you tomorrow!