Bullish on Multifamily, Selective on Deals: Investors Navigate a More Disciplined Market

By Josh Bodin, SVP, Capital Markets Strategy & Trading and Dori Nolan, SVP, Institutional Client Engagement, Berkadia

Berkadia’s second annual Mid-Year Multifamily Pulse Survey finds that investors remain confident in multifamily’s long-term outlook, even as market volatility and tighter underwriting standards are prompting greater selectivity at the individual-deal level.

Conducted in June 2026, the survey drew responses from more than 100 multifamily professionals, primarily principals and directors representing private investment companies. The results point to a market where capital remains available and long-term conviction is intact, but execution standards have risen materially.

The findings point to a market that remains active and constructive, even as investors apply greater discipline to individual deals. Near-term sentiment has become more cautious, but that caution has not translated into a retreat from multifamily. Instead, investors are sharpening their focus on opportunities with durable cash flow, realistic pricing, strong fundamentals, and compelling long-term value. The result is a market where capital remains available, but execution standards are higher and conviction matters more.

That disconnect between sentiment and activity is also reflected in transaction data. RCA reported a 5.7% decline in apartment transaction volume in the first half of 2026 compared with the first half of 2025, while Berkadia recorded a 16.8% increase in multifamily sales volume, reaching $5.6 billion in the first half of 2026 versus $4.8 billion a year earlier. Berkadia also increased launched multifamily deal count by 5.7%, from 442 deals in the first half of 2025 to 467 in the first half of 2026, underscoring that the market is still moving even if execution has become more challenging.

Long-term conviction remains firmly intact. 82% of respondents said they still plan to aggressive growth. In addition, 83% expect multifamily investment conditions to improve by early 2028. The challenge, according to respondents, is not a lack of interest in the sector, but a shortage of opportunities that meet today’s more disciplined underwriting standards.  

Underwriting assumptions remain notably defensive. With cap rates generally in the 4.5% to 5.5% range and cost of capital closer to 6%, many buyers are facing negative leverage on day one, which means underwriting increasingly depends on long-term appreciation that may or may not materialize. Nearly half of respondents are underwriting exit cap rate expansion of 25 to 50 basis points over going-in cap rates, 55% have dispositions on hold due to current volatility, and 73% are assuming rent growth of no more than 2.5% over the next 18 months. These responses suggest investors are prioritizing capital preservation, income durability, and certainty over aggressive assumptions tied to rate cuts, cap rate compression, or a rapid rebound in fundamentals and most notably rent growth. In this environment, basis and replacement cost have become critically important, as investors focus on opportunities where pricing, physical quality, and long-term downside protection are aligned. Core-plus opportunities followed by value-add continue to attract the greatest interest from buyers seeking durable cash flow and lower execution risk.  

Regionally, investor preference is shifting toward markets with more resilient fundamentals and better-aligned supply and demand dynamics. The Midwest emerged as the most preferred investment region for the second half of 2026, cited by 58% of respondents, followed by the Southeast at 52% and the Northeast/Mid-Atlantic at 46%. The results reinforce a broader survey theme: investors remain interested in growth, but are prioritizing durability, downside protection, and execution certainty when deciding where to deploy capital.  

Looking ahead, respondents remain constructive on multifamily’s long-term outlook, supported by easing supply pressures, continued renter demand, and affordability challenges in the for-sale housing market. While near-term volatility and soft operating fundamentals continue to weigh on transaction activity, the survey suggests investors are not stepping away from multifamily — they are simply being far more selective about which deals merit conviction. 

Click here to view the 2026 Mid-Year Multifamily Pulse Survey.