Small Multifamily Investment Snapshot — Q4 2021

The initial year-end 2021 estimate of new small multifamily lending volume surged to $85.4 billion. The current estimate would represent an annual increase of $27.7 billion from last year’s total, or a 48.1% growth rate— the highest annual growth rate since 2012. Moreover, the 2021 originations estimate blows past the previous high of $59.2 billion set in 2019.
National average cap rates for small multifamily properties were effectively flat in the fourth quarter of 2021, rising 1 basis point (bps) and remaining at a rounded 5.2%. While cap rate movements over the past half-year have been marginal, the fourth quarter reading marks the first time that small multifamily cap rates have risen in consecutive quarters since 2017.
All else equal, while risks remain, demand stability and growing liquidity for small multifamily assets are broadly supportive of the sector heading into 2022.
Access more key highlights in our latest Small Multifamily Investment Trends Report.
For more insights on the small multifamily market, view our latest Small Multifamily Investment Trends Report and our Arbor Chatter blog.