Dive Brief:

• Multifamily has remained the most targeted asset class by global investors, according to CBRE's 2024 Global Multifamily Investor Intentions Survey.
• Forty-two percent of domestic and foreign investors favored apartments in 2024 after 30% declared a preference for the asset class in 2023. For the first time in the survey’s history, the segment was the most preferred sector in all three global regions, including the Americas, Europe and Asia-Pacific.
• Although many investors are waiting for distressed sales, 60% of CBRE survey respondents expect small or no price discounts for multifamily assets this year, up slightly from 2023. Only 34% expect mid-to-large price reductions, down from 44% in 2023. 

Dive Insight:

The apartment sales market remains stuck in a rut, but things could change soon. In the report, CBRE said that activity is expected to increase in the second half of the year, with more investors considering lower-risk strategies than in 2023.

A large majority, more than 80% of multifamily investors, said interest rates were the primary impediment to commercial real estate investment in 2024. Credit availability and mismatches in buyer and seller expectations were also cited as top challenges, listed by 73% and 67% of respondents, respectively.

Sixty-two percent of multifamily investors expect to increase their purchasing activity from last year, while 40% expect to sell more. Multifamily had the highest percentage of investors (27%) expecting to sell less this year out of all asset classes.

Seeking discounts

Despite sentiment that there won’t be steep discounts in the market, 47% of apartment buyers view high-risk purchases, including distressed and debt investments, as the most attractive strategies in 2024. That was down from 50% in 2023.

So far, however, those opportunities have been few and far between as lenders continue to work with borrowers. 

“We’ve definitely been seeing lenders who would rather kick the can down the road, give it some time, and see if interest rates can come down a little bit so they can work with that sponsor,” said Jamison Manwaring, the CEO and co-founder of Phoenix-based real estate crowdfunding company Neighborhood Ventures. 

Exactly one-third of respondents preferred lower-risk investments, including core and core-plus strategies. In 2023, 27% of respondents favored those purchases.

Regardless of their strategy, buyers will still see opportunities in the Sun Belt, according to CBRE. Dallas-Ft. Worth; Nashville, Tennessee; Raleigh-Durham, North Carolina; Atlanta; Charlotte, North Carolina; and Miami-South Florida were the most targeted metros.

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