release edition [055]

read time [7 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:

• NMHC: My Conference Recap
• Fed Chair: Meet Kevin Warsh
• Weekly Listen: Peter Linneman

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NMHC

The 2026 NMHC conference was held this past week in Las Vegas.

If you're unfamiliar, NMHC is the largest annual Multifamily conference in the United States.

Each year, thousands of sector participants congregate to connect, network, and collaborate before the year gets underway.

Below are my key takeaways after three days and 27 meetings with my industry peers. Enjoy!

Sentiment

The overall sentiment this year was more optimistic than pessimistic, but I would not characterize it as bullish.

Nearly everyone that I spoke with has come to the realization that fundamentals are likely to remain challenged this year.

Even so, subtle optimism was pervasive as the consensus view seems to be that Multifamily rents and prices may finally bottom in 2026 in markets where they haven't already.

Equity

Several of my conversations focused on equity capital, and my takeaway was simply how much equity exists in raised vehicles that has yet to be deployed.

For example, three of the equity groups that I met with have anywhere from $800M to $1.2B remaining to deploy from their previously raised fund vehicles.

I'm curious to see if (or when) this equity becomes more aggressive as their investment placement period windows begin to narrow.

Also, preferred equity has tightened pricing from 12-15% down to 10-12%, which is a step-change from the past few years.

If short end rates continue to drop, the combination of a bridge-to-bridge refinance with preferred equity could become a viable solution for Multifamily owners that are currently hanging on to their asset(s) by a thread.

Debt

There is no shortage of debt capital in early 2026. Credit is currently pricing at razor thin margins, and price differentiation is virtually non-existent.

This has forced borrowers to focus on non-price variables like execution speed, fee load, flexibility of both covenants and prepayment, certainty of execution, and overall creativity.

Barring a black swan event, I expect debt capital to remain plentiful and aggressive throughout 2026.

Interest Rates

Noticeably absent from this year's meeting was the popular topic, "Where are interest rates headed?".

While this omission was a breath of fresh air, the contrarian in me wonders if the market is becoming complacent with today's relatively stable interest rate environment.

If so, then any dramatic near-term changes could send a shockwave that disrupts transaction or lending activities.

I expect some interest rate volatility this year, but I do not ultimately expect it to negatively alter Multifamily Capital Markets activity in a meaningful manner.

Insurance

The insurance markets are extremely healthy, and many providers are eager to take market share while premiums are low.

I expect insurance rates to rise in 2H 2026 following the current winter freeze that has swept the East coast combined with a nearly inevitable landfall of hurricane(s) after zero making landfall in 2025.

If you're in the market to switch insurance brokers or carriers, now is the time.

Deal Flow

As I wrote about last week in TMD 054, deal flow is Multifamily's Missing Ingredient that will either hinder or allow the Multifamily transaction market to "re-open" to levels not seen since the early 2020s.

As mentioned above, plentiful debt capital combined with a falling cost of preferred equity may put downward pressure on existing sales as many owners in 2026 will seek to avoid selling and instead attempt to refinance if/when possible.

Cap Rates

Another under-discussed topic was cap rates. Going-in cash yield and positive leverage seem to be far more meaningful to equity investors today than just a few years ago.

It's interesting to hear about assets trading in the upper 4% and lower 5% cap rate range today given that fixed rate debt is in the mid- to upper-5% range (depending upon the loan term and interest rate spread).

This tells me that many investors are betting on future market rent growth as rents recover back to, and surpass, previous peak rent levels.

Debt Maturities

This topic was also under-discussed but one that everyone is watching closely.

Most institutional sales are driven by debt maturities or end of fund life events, and I expect the same to ring true in 2026.

While I don't know if the distress dominos will begin to fall in 2026, I would not be surprised if they did.

Deal Profile

The amount of equity capital seeking well-located newer-vintage assets with quality fundamentals is abundant.

The result of this demand flocking to newer vintage properties is that pricing for this asset profile has become extremely efficient, which can negate the benefit of acquiring this deal profile altogether.

Demand always supports price, and current demand for 2000 or newer assets at a discount to replacement cost has never been higher.

Assuming this "flight to quality" continues, I expect cap rates to continue rising in 2026 for older vintage assets in inferior locations.

Multifamily operators that can acquire older vintage assets with reasonably healthy fundamentals at healthy cap rate spreads (relative to newer vintage assets) are likely to benefit in 3-5 years as investors inevitably move out farther on the risk spectrum in pursuit of yield through value-add strategies.

There are times when contrarian investing is worth careful consideration, and I believe 2026 is one of those times.

Fundamentals

Lastly, I was not surprised to hear that many market participants expect Multifamily fundamentals to remain challenged, especially in markets that are still working through elevated levels of new supply.

There are significant structural imbalances that must be sorted out before a semblance of normalcy can be expected in higher supply markets.

Unfortunately, market fundamentals don't firm up over night, so I standby my top two predictions for Multifamily in 2026:

Summary

Overall, market participants are cautiously optimistic (as they were in 2025), with a sense of hope that debt and equity will remain readily available for great deals that can be acquired at compelling prices.

The key will be identifying properties at prices that satisfy equity investor dual-mandates of low risk + high reward.

Institutional equity is attracted to assets with both limited downside risk and strong growth upside.

Total cost basis, cash yield, supply/demand fundamentals, and economic occupancy are all themes worth focusing on in 2026.

Fed Chair

Yesterday it was announced that Kevin Warsh would replace Jerome Powell in May as the Chair of the Federal Reserve.

If you're not familiar, Kevin is a former Fed governor and was involved in supporting Ben Bernanke during the Great Financial Crisis.

From February 2006 until March 2011, he served as a governor on the Fed’s board, nominated to the role by then-President George W. Bush.

By serving as a Fed governor during the 2008 crisis, Warsh also gained experience in the depths of one of the worst financial crises in history.

It's interesting to watch this CNBC interview from July 2025, in which Mr. Warsh changed his historically hawkish tune by calling for rate cuts, in which he said the following:

As Bruce Richards, the CEO of Marathon Asset Management ($24B AUM), noted here on LinkedIn, "Warsh is a bit of a unicorn, as few people combine top-tier Wall Street banking experience, direct crisis-era Fed policymaking (including Bernanke’s inner circle), White House economic advising (Bush), and a long-term partnership with perhaps one of the most successful macro investors ever."

What do you think of this Fed Chair selection?

Weekly Listen

This week's listen is one of my favorite recurring episodes of The Walker Webcast, in which Willy Walker interviews Peter Linneman.

In their 24th public conversation, they discussed the forces shaping today’s market, including employment trends, inflation, rent growth, housing affordability and supply, AI’s impact on jobs, and Peter’s predictions for rate cuts, oil prices, tariffs, and more.

You can watch the full episode here.

Wrap Up

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

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Thanks for reading. See you next week!

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