What is driving the capital exodus? In our opinion, it is a combination of weakening fundamentals, specifically new supply, alongside a structural reset. Of the two, the structural reset is the dominant cause of transactional slowdown.

The differences between the winners and losers hasn’t been this wide in decades - let us explain why.

Multifamily investors have shown little inclination to reverse last year’s slow transaction velocity, with this month’s activity lower than the historical start to the year.

Our CEO reviews the year of 2023 and provides his insights on deciphering market cycles.

Our CEO reveals year-end multifamily market trends, 2024 challenges and expert insights on pricing real estate.

This is a short-term blip in the great pricing reset as most modifications are for less than one year. We expect that multifamily will return to its roots with cash flow distributions accounting for 2/3rds of its investment yield on our upcoming investments. 

In just one month, owners holding floating rate debt that needs to be refinanced have lost over 5% of the available loan proceeds they would have had access to at the beginning of September. Not an enviable position for many owners that are already struggling with increased operating and cap costs escrows as they face a maturity date.

The market pricing still has ways to go before we begin to see normal transaction velocity. Even so, disciplined, and patient investors (such as Essential) are active and seeking early opportunities.

Essential anticipates the second half of 2023 will result in a pricing reset that will catch many multifamily owners off guard. During July, we entered into joint venture understandings with two additional capital partners that once finalized could add up to $900M in buying power for our new national portfolio build.

The market is setting up to present savvy investors with opportunities to acquire high quality, well-located properties with operational upside. Essential’s 2023 Co-GP Fund also reached reservations for 92.5% of its allotment in the month of June.