The Rent Roll with Jay Parsons EP#15 Justin Wheeler | The 2025 Outlook For Multifamily & SFR
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Jan 2, 2025 Justin Wheeler, CEO of Berkadia and a key player in U.S. multifamily capital markets, joins the conversation on rental housing trends. He shares insights on the evolving multifamily and single-family rental markets, including predictions on deal flow and cap rates. They discuss the challenges of rising costs, the impact of a sluggish for-sale market, and the importance of increased housing supply. Wheeler emphasizes the need for balance in addressing affordability and stability, all while navigating upcoming regulatory changes for 2025.
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Declining Apartment Starts
- Apartment construction starts are likely nearing a 10-year low, currently at 336,000 units.
- High debt costs, limited equity, and construction costs hinder new projects, favoring larger developers.
Apartment Supply and Demand
- Many current apartment constructions will finish in the first half of 2025, keeping completions high.
- Strong demand for apartments is expected to continue due to job and wage growth, exceeding the impact of higher home-buying costs.
Capital Market Sentiment
- Investors are increasingly optimistic about multifamily, with declining supply and strong demand expected to boost performance in 2026 and 2027.
- Access to capital remains a challenge, creating uncertainty in the market despite strong investor appetite.