The Rent Roll with Jay Parsons EP#50 Jim Costello | Multifamily Capital Markets Update
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Sep 11, 2025 Jim Costello, the Chief Economist at MSCI Real Assets, joins to share his expertise on the multifamily capital markets. He discusses the potential distress in the apartment sector and the significant lack of development capital. The conversation touches on the current influx of debt funds and strategic insights into the buy box for institutional capital. Additionally, the growing momentum of apartment sales transaction activity is explored, alongside recent headlines about a rent control proposal in Massachusetts.
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Multifamily Still Dominates CRE
- Multifamily remains the dominant CRE sector, making up about one-third of sales over the past 12 months.
- Strong long-term investor demand helps stabilize values despite low transaction counts.
Cap Rates Don't Mirror Interest Rates
- Cap rates have only widened about 100 bps while Treasury and Fed rates moved far more.
- Interest rates matter for deal flow more than they move cap rates one-for-one.
Pricing Indexes Signal A Turn
- MSCI's price index shows multifamily values improving about 40 bps year-over-year, signaling a potential bottom.
- More liquidity and returning debt originations support that stabilization.