1st Quarter Report
April 1, 2025 – Bloomfield Hills, MI
IPO is pleased to announce our 2025 First Quarter multifamily investment sales. Further statistics and the current market outlook are also shared below.
The YTD transaction level has been steady and is quickly accelerating. Market participants have accepted the rate environment and are no longer waiting for “ideal conditions” to emerge before getting back to business. The remainder of the year projects increased transactions and stabilizing prices.
- Q1 closed with 15 multifamily sales reflecting over $51M in transactional volume.
- IPO’s expansion continues in the Midwest with Ohio, Indiana, and Kentucky sales.
- Varied Asset Profile: Market-Rate, Affordable, Student & Senior
Notable Transactions include:
Ponderosa Village – 119 Units – Columbus, OH
Cedarwood Apartments – 146 Units – Lexington, KY
Hull Apartments – 63 Units – East Lansing, MI
It was predicted, expected, and certainly hoped for lower interest rates by now. Well, it’s happening, but at a moderate pace. There is a very complicated set of reasons why, but the reality is that rates are not coming down any significant amount for the foreseeable future. The wishful thinking era has ended and the reality of higher rates -which, historically, are still attractively low- are being slowly accepted in pricing discussions. With a historic amount of multifamily debt maturing this year and in 2026, transactions will accelerate as investors accept lower pricing than they would have during the artificially low-interest rate party. Refinancing options are not nearly as attractive as they were for many prospective sellers a handful of years ago. Cash in to refinance has become a reality for many owners with maturing debt in this stage of the market cycle. Thankfully, many balance sheets are still strong enough to bridge the gap. The appetite and willingness to do so is a different discussion altogether.
Some difficult decisions will be made considering the aforementioned. Good money is still being made and delivering solid returns for most of the transactions we are brokering. The sentiment among active buyers is that current market conditions are perhaps as optimal for purchasing as they can reasonably expect. Operating fundamentals are still very strong across all the markets we service. There is little to no supply-side pressure; occupancy is strong, collections are solid, and rent growth is healthy.
We expect investments in real estate- and multifamily in particular-to begin attracting more capital as the tariff battles wear on. We see downside for corporate earnings and the flight to REITs has already begun. Eventually capital will start exiting equities and return to investment real estate, as the conditions that drove investment capital like treasuries, short-term CDs, and even equities, dry up and present more downside than upside to warrant the risk versus return. It is a very fluid situation, but we envision the tide turning in in favor of multifamily versus equities. While this does not solve the still-challenging debt markets, it provides a tailwind that cures capital stack woes that have prohibited many deals from closing. This is an exciting time in the business, and we see significant room for excellent growth for the near and long-term for midwestern multifamily investments due to macroeconomic factors. The Midwest has led the nation for several years now with rent growth coming from markets like Detroit, Columbus, Chicago and Indianapolis. The risk-adjusted returns for higher profile “gateway” markets and “core” assets make little to no sense compared to the returns available in the Midwest with significantly less risk.
IPO is a brokerage that is made up of nimble and creative problem-solvers who navigate deals in challenging landscapes. We strive to be the best brokerage in the apartment industry and show this in everything we do. Our goal is to build partnerships that stand the test of time, deliver significant value for our clients, and in the process, create generational wealth. We would like to thank our clients for entrusting us with your multifamily investment brokerage needs. As you plan for 2025 and 2026, contact us and let us know how we can help you with any important investment decisions.