Normalization was the thread that tied together multifamily real estate narratives in 2025. Asset valuations stabilized, cap rates held steady, and rent growth was balanced. Entering the new year, normalization is still driving the conversation, as shown by newly released data from the Federal Reserve Bank of Atlanta on real estate conditions and associated trends.
The single-family rental (SFR) sector, supported by healthy fundamentals, demonstrated its strength and durability again last quarter as the for-sale home market softened.
Arbor Realty Trust recently wrapped up its 18th Annual Holiday Drive, which raised nearly $22,000 for Long Island-based Family & Children’s Association (FCA). As in past years, Arbor extended the impact of the drive by matching all employee contributions dollar-for-dollar.
The multifamily rental households estimate reached an all-time high of 22.4 million in 2025, following meaningful post-pandemic shifts in affordable housing and rental demand. The commercial real estate pillar maintained its growth, as new inventory and persistent homeownership constraints supported a rising number of multifamily household formations.
In any multifamily project, site selection is a critical step requiring careful consideration. From New York to Los Angeles and all the major metropolitan areas in between, U.S. metros are ripe for new investment, but narrowing down the optimal location is never easy. In a new video, Dr. Sam Chandan, one of the commercial real estate industry’s leading scholars, shares his expert insight into Arbor Realty Trust’s latest Top Markets for Multifamily Investment Report.
The U.S. rental housing market remained strong and stable in 2025, spreading through the multifamily and single-family rentals sectors. Here’s a look at this year’s top articles from Arbor Realty Trust, in case you missed them.
Senior debt, a foundational element of most multifamily property acquisitions and developments, rarely covers the full capital requirement. To bridge the gap between what senior lenders offer and what sponsors need, many borrowers pursue mezzanine financing, which provides greater leverage and more control.
The single-family rental (SFR) sector once again demonstrated strength and durability last quarter amid a general softening of the for-sale home market. Arbor Realty Trust’s Single-Family Rental Investment Trends Report Q4 2025, developed in partnership with Chandan Economics, leverages first-class data analysis to show why SFR’s investment return profile has grown more attractive in the last year.
Q: What is the Arbor Small Multifamily Price Index (ASMPI)?
A: The ASMPI estimates the average price appreciation for small multifamily properties on a quarterly basis, by comparing small multifamily cap rates and small multifamily rents.
Q: What is an index?
A: • An index starts with an assigned base, then increases or decreases with the change in value. In the case of the ASMPI, a base value of 100.0 is assigned to Q1 2000.
• For example, if the ASMPI stood at 100, then increased 5.0% during the quarter, the new value would be 105. Likewise, if the index decreased 5.0%, the new value would be 95.
• Other frequently used indices in the real estate industry include the S&P CoreLogic Case-Shiller Home Price Index and the Consumer Price Index.
Q: What is the purpose of the ASMPI?
A: • Given the lack of affordable rental housing supply to meet the robust demand, the index’s quarterly data provides insights on potential investment opportunities in the property sector.
• The index fills an important need in the marketplace for quarterly data analytics focused on small multifamily properties.
Q: How is the ASMPI calculated?
A: The ASMPI is calculated by comparing the historical relationship of cap rates on properties with primary mortgages between $1 million and $7.5 million, and the rental income earned on small multifamily properties (5 to 49 units).
Q: How do you define a “small multifamily property”?
A: For the purposes of the ASMPI, we define small multifamily properties as those which have 5 to 49 units. This is consistent with the distinctions made in the U.S. Census Bureau’s American Community Survey.
Q: How do you define a “primary mortgage” on a property?
A: A primary mortgage means that at least 50% or more of the financing on the property comes from this loan. For the purposes of the ASMPI, we use Chandan Economics’ database of loans with primary mortgages of $1 million to $7.5 million.
Q: What is the formula for calculating the ASMPI?
A: Property Valuation = Net Operating Income / Cap Rate
Q: What is a cap rate?
A: A cap rate is the annual rate of return on a property, also known as the annual yield.
Q: How do you determine the cap rates for the formula?
A: Chandan Economics tracks small multifamily cap rates through its loan database and economic models consisting of small multifamily properties with primary mortgages between $1 million and $7.5 million.
Q: How do you determine the net operating income for the formula?
A: • Operating income is calculated based on Chandan Economics’ models of annual contract rents for multifamily properties with 5 to 49 units, using data published by the U.S. Census Bureau in the American Community Survey.
• Operating income is adjusted for any vacancy losses. Other forms of property income other than direct rental income are not included as part of the model.
• An assumption in the model is that variable operating expenses are passed through to tenants.
Q: What is the methodology for the ASMPI?
A: The Arbor Small Multifamily Price Index is calculated by comparing the historical relationship of cap rates and operating income. Cap rates data are sourced from Chandan Economics’ loan database and data models consisting of properties with primary mortgages between $1 million and $7.5 million. Operating income is estimated by Chandan Economics’ models of annual rents on multifamily properties with 5 to 49 units. Primary sample data used for small multifamily rents model is sourced by the U.S. Census Bureau as part of the American Community Survey.
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