Multifamily’s Next Chapter: Demand Strength Meets Investor Opportunity

By Nicholas Matus, President & Chief Operating Officer, Benedict Canyon Equities

Joe Austin, Director, Investor Relations & Capital Raising, Benedict Canyon Equities

After years of rapid construction, multifamily markets across the U.S. are entering a new phase of balance and this transition is creating one of the most compelling entry points we’ve seen in more than a decade.

Demand is proving remarkably strong, with Q2 absorption among the best on record¹. At the same time, renter affordability has improved: wage growth has outpaced rents for more than 31 months, bringing rent-to-income ratios back near long-term norms². And with new construction starts down more than 50 percent from their peak, the supply wave that pressured markets is set to taper meaningfully by 2026–27³.

For investors, this combination of resilient demand, healthier affordability, and a clear path to lower supply lays the foundation for a powerful recovery in rent growth and property performance. And with valuations still 25–35 percent below peak, the opportunity to invest early in the next cycle has rarely been clearer⁴.

National Themes: Short-Term Pressures, Long-Term Tailwinds

• Demand remains resilient. Net absorption in Q2 2025 ranked among the strongest ever recorded¹.

• Affordability has improved. Rent-to-income ratios are back near 20 percent, and wage growth has consistently outpaced rent growth⁵.

• Supply is today’s headwind, tomorrow’s tailwind. With roughly 500,000 units currently in lease-up, concessions have risen but new starts have dropped sharply, ensuring a future undersupply⁶.

• Investor takeaway: Temporary softness from supply is less a signal of weakness and more the setup for renewed rent growth once the pipeline clears.

Regional Spotlights

Reno – First In, First Out

Reno was among the first Western markets to see a construction surge, with more than 5,600 units underway in 2022⁷. Yet its diverse economy anchored by Tesla, Switch, and Amazon have helped absorb new supply quickly. By late 2024, rents and occupancies were rising again⁸. Investor takeaway: Reno’s fundamentals point to early-cycle recovery and attractive discounted entry opportunities.

Phoenix – The Tech Effect

From 2021 through 2024, Phoenix delivered approximately 67,000 new units, expanding supply by about 20%. Despite this influx, the market absorbed nearly 19,000 units in 2024 alone, a record pace that more than doubled its historical annual average⁹. Investor takeaway: Phoenix remains one of the most dynamic U.S. growth markets, where near-term dislocation creates long-term upside.

Salt Lake City – Recovery on the Horizon

Rent growth softened as deliveries outpaced absorption for seven consecutive quarters. Still, 2024 saw nearly 8,000 units absorbed, and with new supply waning, forecasts call for stabilization by the end of 2025¹⁰. Investor takeaway: Patience here is rewarded with SLC poised for an inflection point as supply eases.

Las Vegas – Resilient and Rebounding

After rapid rent growth from 2020–2022, Vegas saw a short-lived dip in 2023 before rebounding in 2024. Occupancy stabilized, absorption turned positive, and rents are forecast to grow +3.1 percent in 2025¹¹. Investor takeaway: Volatility creates windows — Las Vegas highlights how fundamentals can snap back quickly, providing asymmetric upside.

Capital Markets Context

• Transaction activity: ≈ $140 billion in multifamily sales over the past 12 months¹².

• Cap rates: Averaging ~5.4 percent, with top assets still trading in the 4s¹³.

• Dry powder: Significant capital raised for distress remains undeployed¹⁴.

• ·Dynamic: Sellers are under less pressure, but pricing already reflects 25–35 percent discounts from peak valuations⁴.

Investor takeaway: With capital on the sidelines and bid-ask spreads narrowing, investors acting now can capture compelling assets at cycle-low pricing before broader liquidity returns.

Looking Ahead

At BCE, we view today’s multifamily landscape not as a pause, but as a reset that favors disciplined investors willing to lean in while sentiment is cautious. Strong absorption, improved affordability, and a shrinking construction pipeline all point to a powerful recovery over the next 12–24 months¹⁵.

We are actively pursuing acquisitions in markets where fundamentals are stabilizing and pricing is compelling. For investors, the opportunity to step into the new cycle early at meaningful discounts may prove to be one of the most attractive windows in years.

We’ll continue to share our perspective as these dynamics evolve and welcome the opportunity to discuss where we see the strongest opportunities emerging.

Sources Key

¹ RealPage, U.S. Multifamily Market Update, Q2 2025

² Bureau of Labor Statistics (BLS), Average Hourly Earnings, Aug 2025

³ U.S. Census Bureau, New Residential Construction, Aug 2025; Yardi Matrix, Construction Pipeline, Sept 2025

⁴ MSCI RCA, U.S. Apartment Price Index, Q3 2025; Green Street Advisors, CPPI Multifamily Segment, 2025

⁵ Zillow, Rental Affordability Report, Q3 2025

⁶ Marcus & Millichap, Multifamily Investment Forecast, 2025; Yardi Matrix, National Report, Sept 2025

⁷ CoStar Market Analytics, Reno, Q2 2025

⁸ Marcus & Millichap, Reno Market Report, 2025

⁹ RealPage, Phoenix Market Trends, Q4 2024; CoStar, Phoenix Snapshot, 2025

¹⁰ CBRE Research, Salt Lake City Multifamily Forecast, 2025; CoStar, SLC Q1 2025

¹¹ Yardi Matrix, Las Vegas Metro Outlook, Sept 2025; Marcus & Millichap, Las Vegas Report, 2025

¹² MSCI RCA, U.S. Capital Trends – Apartments, Q3 2025

¹³ CBRE, Multifamily Cap Rate Survey, Mid-Year 2025

¹⁴ Preqin, Private Real Estate Dry Powder Report, 2025

¹⁵ CBRE, Multifamily Market Outlook, 2025; Marcus & Millichap, Multifamily Investment Forecast, 2025