release edition [056]

read time [5 minutes]

Welcome to The Multifamily Download, a weekly newsletter where I provide institutional insights to help you build an exceptional Multifamily career.

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Today at a Glance:

• Distress: CRED iQ Update
• Supply: Yardi's 1Q26 Forecast
• Equity: The Playbook
• Weekly Listen: TreppWire 377

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Distress

To begin, I think it's important to consider sources when doing research or creating a market thesis.

For example, Blackstone and CBRE calling the market bottom for CRE prices in early 2024 felt self-serving, because both firms benefit from increased market participation.

Now, I don't fault them for "talking their book", because we all do it to a certain degree.

Even so, I do my best to find data-backed research that is void of overt opinions and politics, as those sources tend to have the most pragmatic and insightful information.

As cracks begin to emerge across the Commercial Real Estate sector, I will be keeping an eye on various sources to ensure my composite view is as unbiased and accurate as possible.

This week, I thought it may be helpful to look at recent blogs from CRED iQ, a leading commercial real estate data and analytics platform designed to bring transparency, structure, and actionable intelligence to complex CRE debt markets.

Below is a graph showing Cap Rate trends according to CRED iQ's loan analytics.

What struck me about this graph is the relatively stable Multifamily cap rates, which I will note are structurally and materially higher than 2021-2022 when sales volume peaked.

According to CRED iQ, "Multifamily properties demonstrated remarkable resilience, maintaining the tightest cap rate band among major property types. Starting at 5.63% in Q1 and finishing at 5.71% in Q4, multifamily’s mere 8-basis-point expansion reflects sustained investor confidence in residential fundamentals and the asset class’s defensive characteristics."

However, the ruthless combination of cap rate expansion (~150-200 basis points higher than 2021-2022) alongside flat or decreasing NOIs over the same time period has created an extremely challenged capital stack for many existing owners.

Let's consider a hypothetical scenario.

Suppose a property was purchased in 2022 for $25M at a 4.00% cap rate with a $1M NOI.

Let's also assume the property was leveraged at 75% of a $28M all-in cost, equating to a $21M total loan balance.

Today, that property is worth just $18.2M at a 5.50% market cap rate if 0% NOI growth has occurred.

In fact, the NOI must have grown by ~15% just to payoff the $21M loan at par with a 100% equity loss.

Shockingly, the NOI must have grown by ~60% simply to exit at the breakeven point of $28M.

My point is this: Commercial Real Estate (and Multifamily) distress is real, even if it's not evident or actionable yet.

Supply

Yardi Matrix recently released their updated supply forecast as of Q1 2026, which included healthy upward revisions in the near-term forecasts for 2026, 2027, and 2028 as compared to their prior Q4 2025 forecast.

As shown below, the current supply pipeline supports nearly 469,000 units delivering in 2026 and another 440,000 in 2027.

For reference, total Multifamily completions between 2019-2022 averaged 403,000 according to Yardi's data (I pulled 2019 completion data from their Q3 2025 forecast).

The forecast above assumes nearly ~12% more supply delivering annually, on average, from 2026 through 2029 than the 403,000 units that were completed on average annually during the 2019-2022 period.

Additionally, many new construction properties are taking longer to complete and deliver now than originally anticipated when shovels first went into the ground as shown on the graph below.

I expect this elongated delivery timeline to exacerbate the negative impacts that elevated supply is having on market fundamentals and rent growth, especially in higher supply markets.

The summary section of this report is particularly insightful, so I thought I'd share it below. (bold emphasis added is mine)

"The Q1 2026 forecast update increased forecast new supply for nearly all years. Previous forecasts had anticipated the reduction in new-construction activity that was recorded in 2024 would continue into 2025. This assumption has turned out to be incorrect. As a result, the supply forecast no longer anticipates new supply bottoming in 2027 at or below 400,000 units.

National construction starts have exceeded expectations. High-supply markets experienced a sizable but not complete reduction in new-development activity. For these markets, new development has been reduced to roughly pre-pandemic levels, while markets that missed the recent supply wave continue to record steady or increasing levels of new development."

The TL;DR is this:

Even if Kevin Warsh and The Fed lower the Fed Funds Rate this Summer, and, even if the U.S. Treasury rates happen to come down with it, the structural fundamentals of Multifamily will still be challenged from a supply and rent growth standpoint.

As I've written about in the past, and as I will continue to write about in the future, acquiring Multifamily in markets that are delivering 3% or less of existing stock is a defensive approach that should be carefully considered in today's economic climate.

Caveat Emptor.

Read the Q1 2026 Yardi Forecast here.

Equity

One of my key takeaways from NMHC was the vast amount of Equity capital that has been raised but still needs to be deployed.

As a result, I created what I'm calling "The Equity Raising Playbook" to help bridge the gap between reasonably investible deals and relatively selective Equity capital.

This playbook has 100+ questions, multiple answers to each question, and detailed context behind the answers.

I also built A.I. implementation strategies across each of the 13 key Q&A topics.

You can get access to the playbook here. (it's free)

Are you seeing or hearing any common objections or challenges when raising equity today?

Weekly Listen

This week's listen is TreppWire Episode 377 hosted by Lonnie Hendry, the Chief Product Officer at Trepp.

This episode, published 1.29.2026, covers a number of timely topics including an economic update, the Fed holding rates steady, Multifamily insights from NMHC, and more.

You can listen to the full episode here.

Wrap Up

That's it for today. I hope you found this edition of The Multifamily Download insightful.

Consider sharing this link to The Multifamily Download with a friend or colleague.

Your feedback is appreciated, so feel free to reply anytime.

Thanks for reading. See you next week!

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