Multifamily investor sentiment improves even as debt financing challenges continue. Strength in the labor market, robust apartment demand, and stable consumer sentiment are some of the reasons behind this, but another significant factor is the decline in the multifamily construction pipeline.

NMHC: “Quarterly Survey of Apartment Conditions (April 2024)” - https://www.nmhc.org/research-insight/quarterly-survey/2024/nmhc-quarterly-survey-of-apartment-conditions-april-2024/

Fannie Mae: “Commercial-to-Residential Conversions: A Review of Existing Research” - https://www.fanniemae.com/media/51071/display

TheRealDeal: “Chavin surrenders Loop office-to-resi play with deed-in-lieu of foreclosure” - https://therealdeal.com/chicago/2024/04/23/intersection-drops-loop-office-conversion-with-deed-in-lieu/

Moody’s Analytics: “U.S. Consumers Remain Resilient but Blemishes Exist” - https://cre.moodysanalytics.com/insights/cre-news/u-s-consumers-remain-resilient-but-blemishes-exist/

For the latest multifamily news from across the internet, visit the Gray Report website: ⁠https://www.grayreport.com/⁠

Sign up for our free multifamily newsletter here: ⁠https://www.graycapitalllc.com/newsletter⁠

DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest. Any offering would be made through a private placement memorandum and would be limited to accredited investors.

Comments this week from Federal Reserve Chair Jerome Powell are among the most forceful indications yet that interest rate cuts may be delayed past initial expectations. While some extreme predictions push the rate cuts all the way out to March 2025, futures data is pointing closer to September (at the moment). These shifting interest rate expectations may curb the activity of a CRE sales market that was just beginning to revive after a sluggish 2023, but strong housing demand and solid apartment fundamentals continue to attract investor attention in the multifamily market.

Reuters: “Blunt Powell signals rate cut plans on ice” - https://www.reuters.com/markets/us/global-markets-view-usa-2024-04-17/

Bloomberg: “Vanguard Warns 10-Year Treasury Yields Risk Jump Back to 5%” - https://www.bloomberg.com/news/articles/2024-04-18/treasuries-vanguard-warns-10-year-yields-risk-spiking-back-to-5

CME Group: "FedWatch Tool" - https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html

RealPage: “U.S. Marks Largest Volume of Quarterly Apartment Supply in History” - https://www.realpage.com/analytics/1st-quarter-supply-highest-ever/

RealPage: “Putting 1st Quarter 2024 Apartment Demand in Perspective” - https://www.realpage.com/analytics/perspective-us-apartment-demand-1st-quarter/

For the latest multifamily news from across the internet, visit the Gray Report website: ⁠https://www.grayreport.com/⁠

Sign up for our free multifamily newsletter here: ⁠https://www.graycapitalllc.com/newsletter⁠

DISCLAIMERS: This video does not constitute professional financial advice and is for educational/entertainment purposes only. This video is not an offer to invest. Any offering would be made through a private placement memorandum and would be limited to accredited investors.

A 3.5% annual jump in CPI inflation numbers has led investors and experts to rethink their expectations of an interest rate cut in mid-year 2024, but Blackstone's recent agreement to acquire Apartment Income REIT Corp. for $10 billion could spark greater investment activity in spite of elevated interest rates, especially given the improving fundamentals in the apartment market.

Sources discussed in this episode:

Moody’s Analytics: “Q1 2024 Preliminary Trend Announcement” - https://cre.moodysanalytics.com/insights/cre-trends/q1-2024-preliminary-trend-announcement/

The Conference Board: "U.S. Leading Economic Index" - https://www.conference-board.org/topics/us-leading-indicators

The Wall Street Journal: "What's Wrong with the Economy? It's You, Not the Data" - https://www.wsj.com/economy/consumers/whats-wrong-with-the-economy-its-you-not-the-data-cfa911e6

Bureau of Labor Statistics: "The Employment Situation - March 2024" - https://www.bls.gov/news.release/empsit.nr0.htm

Apartment List: “March 2024 Rent Report” - https://www.apartmentlist.com/research/national-rent-data

CBRE: “Made in the Midwest” - https://www.cbre.com/insights/reports/made-in-the-midwest

For the latest multifamily news from across the internet, visit the Gray Report website: ⁠https://www.grayreport.com/⁠

Sign up for our free multifamily newsletter here: ⁠https://www.graycapitalllc.com/newsletter⁠

Learn more about Gray Capital's latest multifamily investment offering for accredited investors: https://www.graycapitalllc.com/new-offering/

DISCLAIMERS: This video does not constitute professional financial advice and is for educational/entertainment purposes only. This video is not an offer to invest. Any offering would be made through a private placement memorandum and would be limited to accredited investors.

Costs for homebuyers have been growing at more than twice the rate as rentals, making renting a more affordable option. Buoyed by recent data on apartment fundamentals multifamily investors are re-entering the market, undaunted by persistent high interest rates, last year's sluggish rent growth, and projections of elevated supply through the end of 2024.

The Federal Reserve has thus far not deviated from its projections of 3 federal funds rate reductions in 2024, but it is in no hurry to start. While current elevated rates are not ideal for multifamily borrowers, multifamily investors with a longer-term view of the apartment market and housing demand have markedly increased their intentions to invest this year.

Sources discussed in this episode:

The Wall Street Journal: “Stocks Gain after Fed Holds Rates Steady” - https://www.wsj.com/livecoverage/fed-meeting-fomc-interest-rate-decision-march-2024

Trepp: "Trepp Property Price Index (TPPI): Rate Cut Speculations Shape Varied Property Sector Performance in Q4 2023" - https://www.trepp.com/trepptalk/tppi-2023-q4-rate-cut-speculations-shape-varied-property-sector-performances

Cushman & Wakefield - “Deciphering Today’s Debt Market​” - https://www.cushmanwakefield.com/en/united-states/insights/deciphering-the-debt-market

CNBC: “Biden targets ‘rent gouging’ landlords as high housing costs factor into 2024 race” - https://www.cnbc.com/2024/03/19/biden-targets-rent-gouging-landlords-as-high-housing-costs-2024-race.html

The White House: “FACT SHEET: President Biden Announces Plan to Lower Housing Costs for Working Families” - https://www.whitehouse.gov/briefing-room/statements-releases/2024/03/07/fact-sheet-president-biden-announces-plan-to-lower-housing-costs-for-working-families/

U.S. Department of Housing and Urban Development: "Existing Policy on Non-Rent Fees in Housing Choice Voucher (HCV) and Project-Based Voucher (PBV) Programs" - https://www.hud.gov/sites/dfiles/PIH/images/HCV_PBV%20Non-Rent%20Fees%20Chart_Final_2-21-24.pdf

For the latest multifamily news from across the internet, visit the Gray Report website: ⁠https://www.grayreport.com/⁠

Sign up for our free multifamily newsletter here: ⁠https://www.graycapitalllc.com/newsletter⁠

Learn more about Gray Capital's latest multifamily investment offering for accredited investors: https://www.graycapitalllc.com/new-offering/

DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest. Any offering would be made through a private placement memorandum and would be limited to accredited investors.

In a return appearance on the Gray Report, RealPage

Multifamily loan maturities have not led to a full-scale crisis in the apartment investment market, but the issue is far from resolved for many borrowers, which could lead to pockets of distress in the sector.

Grant Cardone shares his inimitable insights on the current state of multifamily investment and specific markets across the country.

Gray Report host Spencer Gray speaks with guest Paul Fiorilla, Director of Research at Yardi Matrix, and reviews the most important trends affecting the multifamily market in 2024.