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MSCI: Multifamily Faces Steepest Price Drop Since 2008
Multifamily real estate is under strain as price declines accelerate and rent growth fails to pick up—even during peak leasing season.
Good morning. Fresh data from MSCI shows that multifamily—long a commercial real estate frontrunner—is feeling the squeeze, with prices falling faster and rent growth stalling despite what should be its busiest season.
Today’s issue is brought to you by Blake Capital Group.
🎙️ This week on No Cap podcast, Andover Properties CEO Brian Cohen shares how he scaled a self-storage empire, why today’s best deals are in once-overlooked assets, and how AI and data are driving their competitive edge.
Market Snapshot
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Supply Surge
Multifamily Market Under Pressure as Prices and Rents Slide
Multifamily is leading the slide as prices, sales volumes, and rent growth continue to falter.
Pricing pressure: According to MSCI Real Assets, multifamily property prices fell 1.5% from March to April and a sharp 12.1% year-over-year—marking the steepest annual drop since the 2008 financial crisis. The rate of change in pricing momentum has continued to deteriorate since market peaks in 2022, signaling broader instability in the sector.
Sales volume slips: Transaction volume in May fell 18% year-over-year to $8.2 billion, snapping an 11-month streak of double-digit growth. Sales of garden-style apartments plummeted 30%, while mid- and high-rise assets managed a 3% gain. Single-asset deals declined 17%, and portfolio or entity-level transactions dropped 23%. Lower prices and fewer deals are combining to shrink the market.
Flatlining: Multifamily rent trends continue to disappoint. According to Markerr, rents have now declined modestly for 23 consecutive months, defying seasonal expectations for stronger summer growth. New supply has played a major role, keeping rent growth subdued despite relatively favorable year-over-year comparisons.
Supply pipeline still full: Although new construction starts are slowing, completions are still rising. Yardi Matrix revised its forecast upward, projecting completions to grow 3.3% in 2025 and 11.5% in 2026. RealPage data suggests permitting and starts may have bottomed, but the existing pipeline will keep pressure on rents.
➥ THE TAKEAWAY
Big picture: Multifamily fundamentals are still out of balance. Prices are dropping, rents are stagnant, and new supply isn’t slowing fast enough to stabilize the sector.
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✍️ Editor’s Picks
Unlock hidden revenue: Many parking lots lose revenue to legacy operators. Get a custom proposal from AirGarage to uncover hidden costs—owners see an average 23% revenue lift. (sponsored)
GOP win: In a narrow 218–214 vote, the House passed President Trump’s sweeping $1.2T tax-and-spending package.
Jobs report: June saw 147K new jobs, but slowing private-sector growth and declining labor force participation point to a cooling job market.
Market cooldown: Sun Belt homes are taking longer to sell as rising inventory, high mortgage rates, and investor sell-offs cool once-hot markets.
Stalled market: CRE deal volume remains low despite stable liquidity and economy, as misaligned price expectations, risk repricing, and widespread loan extensions stall transactions.
Cash surge: Manhattan home sales jumped 17% in Q225, fueled by record-high cash purchases that made up 69% of transactions.
Regulatory gaps: The US Appraisal Subcommittee, critical to maintaining trust in real estate valuations, has operated quietly for seven months with 30% fewer staff.
REIT recovery: While REITs typically dip during recessions, they’ve historically outperformed stocks in downturns and rebounded faster.
🏘️ MULTIFAMILY
Temporary lifeline: A federal judge approved emergency funding to keep Joel Wiener’s bankrupt NYC apartment buildings running through July 11.
Mall makeover: Crow Holdings is proposing 495 apartments at Atlanta's aging Northlake Mall, betting on multifamily as a catalyst for revitalization.
Modular mission: Cook County has launched a $12M modular housing initiative in Humboldt Park, aiming to deliver 120 affordable homes and tackle Chicago’s deepening housing shortage.
🏭 Industrial
Blackstone bet: Blackstone acquired a $718M industrial portfolio from Crow Holdings, betting on long-term value as tariffs slow new supply and boost demand for logistics space
Structural strength: Prologis sees short-term leasing uncertainty amid trade and supply chain volatility, but long-term demand remains strong due to e-commerce and structural growth trends.
Florida footprint: Toronto-based Granite REIT has acquired the Coral Springs Logistics Center in South Florida for $36.4M.
Houston milestone: An unnamed global electronics firm has acquired Fairbanks Logistics Park, Houston’s largest industrial deal of 2025.
🏬 RETAIL
Spooky surcharges: Halloween retailers face supply chain uncertainty and rising costs as tariffs on Chinese goods threaten inventory levels, pricing, and retail tenant stability.
Chapter 11: Del Monte Foods has filed for bankruptcy and is pursuing a sale of assets, including its headquarters and production facilities.
Driving foot traffic: Shopping centers are turning underused areas into vibrant, guest-friendly pop-ups to drive traffic, boost sales, and test future tenants.
🏢 OFFICE
Record vacancy: US office vacancies hit a new high at 20.6% in Q2, with weak demand, remote work, and looming federal lease cuts continuing to weigh heavily on the sector.
Uber expands: Uber is doubling its Miami office footprint with a new 13K SF lease at Blackstone’s 3 MiamiCentral.
Federal retreat: California leads GSA lease cancellations in 2025, opening up aging office space for possible conversion or discounted re-leasing.
Downtown demand: LA office leasing hit 3.7M SF in Q2, its fourth straight quarter above the five-year average.
🏨 HOSPITALITY
Weekend warriors: US hotel performance ended June flat as strong weekend travel offset weak weekday demand, with rural and secondary markets outperforming major metros like New York and LA.
📈 CHART OF THE DAY

Core CRE loan delinquencies have steadily increased from post-GFC lows, reaching $31.4B in Q125, more than double the $15.4B level in 2020, driven by a surge in 90+ day past-due loans.

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