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Investor Appetite for Apartments Surges—Even as Rent Demand Slumps

Investor Appetite for Apartments Surges—Even as Rent Demand Slumps

Despite falling rents and rising vacancies, big money is chasing multifamily deals, betting on a longer-term market rebound.

Nina Dale
February 05, 2026

Together with

Good morning. Despite falling rents and rising vacancies, big money is chasing multifamily deals, betting on a longer-term market rebound.

Today’s issue is sponsored by InvestNext—See how top firms streamline K-1s and deliver a smoother investor experience this tax season.

🎙️Worth a listen: Alex Killick of CW Capital breaks down how CMBS special servicing really works when loans go sideways—and why today’s CRE distress looks nothing like the last cycle.

CRE Trivia 🧠

Which country surpassed Japan as the world’s third-largest economy in 2025?

(Answer at the bottom of the newsletter)

Market Snapshot

S&P 500

GSPC

6,882.72

Pct Chg:
-0.51%

FTSE NAREIT

FNER

779.02

Pct Chg:
+1.53%

10Y Treasury

TNX

4.276%

Pct Chg:
+0.003

SOFR

30-DAY AVERAGE

3.66%

Pct Chg:
-0.00

*Data as of 2/4/2026 market close.

HEATING UP

Investor Appetite for Apartments Surges—Even as Rent Demand Slumps

Camden Property Trust is seeing overwhelming interest in its $1.5B California apartment portfolio, revealing a deepening disconnect between soft rental fundamentals and bullish investor sentiment.

A big bet on the Sun Belt: Camden Property Trust has begun quietly shopping its California portfolio—11 apartment communities worth about $1.5 billion—and is seeing major interest. CEO Ric Campo said investor demand is “huge,” with hundreds of potential buyers. The REIT is shifting focus entirely to the Sun Belt, citing better long-term NOI growth, friendlier regulations, and a more dynamic workforce.

Fundamentals take a hit: January 2026 saw the steepest annual rent drop since late 2023, down 1.4% YoY, per Apartment List. Vacancy hit a record high of 7.3%, and units are taking longer to lease—averaging 41 days. While multifamily construction is tapering from its 2024 peak, thousands of new units are still entering a sluggish market.

The contrarian case: Despite soft fundamentals, investor enthusiasm is heating up. According to Berkadia, 87% of surveyed multifamily investors plan to expand portfolios in 2026. Private funds and REITs alike are targeting the Southeast, Midwest, and Texas, betting that by 2027, slowing construction and stronger household formation will tighten supply and push rents higher.

➥ THE TAKEAWAY

Zoom out: Location will matter more than ever, with hyper-focus on regulatory climate and growth prospects. Camden’s California exit aligns with a broader shift toward business-friendly, lower-cost Sun Belt states. Investors are also eyeing niche segments like senior living and student housing, drawn by favorable demographic tailwinds.

TOGETHER WITH INVESTNEXT

How Top Firms Handle K-1s Without Investor Friction

Tax season can strain investor relationships when K-1s are late or unclear.

InvestNext’s 2026 Tax Season Checklist shows how real estate investment firms prepare early, communicate clearly, and distribute tax documents efficiently.

Explore proven processes, compliance considerations, and planning strategies that help teams stay organized while delivering a smoother investor experience during tax season.

*This is a paid advertisement. Please see the full disclosure at the bottom of the newsletter.

✍️ Editor’s Picks

Rare find: Dallas-based Reap Capital acquiring a mismanaged 249-unit asset at 76% occupancy, deploying the same turnaround strategy proven across 1,000+ units in the submarket. (sponsored)
M&A momentum: JLL reports that strategic real estate M&A activity remained resilient in late 2025, with cross-border deals and privatizations shaping sector trends.
Inventory squeeze: Homebuilders are asking the White House for policy help as high rates and zoning limits worsen an inventory glut, stalling new housing development.
Trust over tech: Capital raising isn’t closed by portals. It’s earned through people. See how top GPs use technology to amplify relationships, not replace them. (sponsored)
Funding confidence: Oracle aims to reassure investors with a $50B AI infrastructure plan, signaling confidence in long-term cloud and data center growth.
Market lift: REITs entered 2026 with broad-based gains, as lower rates, better fundamentals, and rising investor optimism propelled performance across sectors.
Deal drought: Moody’s found that CRE deal volume in December 2025 fell sharply, capping a year of investor caution and limited lending.

🏘️ MULTIFAMILY

Slowing rent: Yardi Matrix projects rent growth will remain muted in 2026 amid elevated supply, with long-term fundamentals staying healthy in many metros.
Meta moves: Meta bought a prominent Sacramento office building, betting on downtown revitalization despite California’s broader office market struggles.
Transit fix: A new bipartisan bill targets zoning reforms and incentivizes transit-oriented development to address the nation’s worsening housing affordability crisis.
MG's big buy: MG Properties acquired a San Diego multifamily community for $91M, signaling continued investor appetite for quality Sun Belt assets.
Condo controversy: Aston Martin Residences’ condo board sued the developer, alleging missing amenities and secretive service deals in a luxury tower meltdown.

🏭 Industrial

Jet-fueled growth: A surge in aerospace activity is spurring industrial real estate gains nationwide, as cities land major projects tied to defense and innovation.
JV power: CubeSmart and CBRE Investment Management formed a $250M JV to acquire self-storage assets, reflecting continued confidence in the niche sector.
Warehouse watchdog: ICE is pursuing the purchase of a 324K SF warehouse in Merrimack, NH, for a regional immigration detention center.
Lab discount: A Burlington life sciences conversion sold at a discount to a battery manufacturer, underscoring shifting demand in the lab real estate sector.

🏬 RETAIL

Trillion club: Walmart surpassed a $1T market cap, joining the elite valuation club thanks to strong performance in both retail and e-commerce.
Absorption rise: Newmark reports positive net retail space absorption in Q4 2025, with rents rising as retailers selectively expand amid stable consumer demand.
Mega mall: TIAA and Simon Property are finalizing a $615M deal to recapitalize The Florida Mall, reaffirming investor confidence in top-tier retail assets.

🏢 OFFICE

Sunshine pitch: Billionaires Stephen Ross and Ken Griffin are investing $10M to promote South Florida as the next major business hub, aiming to lure firms from cities like New York and Chicago.
Seattle signal: Former NBA team owner Howard Schultz bought a building near Seattle’s Space Needle, adding to bets on a downtown rebound.
Chicago exit: Brookfield sold a Chicago office tower at a steep discount, highlighting persistent distress in urban office markets.

🏨 HOSPITALITY

Marriott move: Marriott will reflag a prominent Las Vegas property as part of its Autograph Collection, continuing its expansion in lifestyle-focused hospitality.
Status quo: Hoteliers should expect more of the same through mid-2026, with steady demand, moderate rate growth, and lingering staffing challenges.

📈 CHART OF THE DAY

Total U.S. population growth slowed to its weakest pace since COVID, rising just 1.2 million people (+0.5%) as immigration fell sharply and births hit a record low.

CRE Trivia (Answer)🧠

According to the IMF, Germany surpassed Japan in 2025 to become the world’s third-largest economy, behind only the United States and China.

Investor Appetite for Apartments Surges—Even as Rent Demand Slumps

Despite falling rents and rising vacancies, big money is chasing multifamily deals, betting on a longer-term market rebound.