The small multifamily subsector, strengthened by sound structural fundamentals, is well-positioned to face distress due to interest-rate pressure. Even though pricing has slid lower and cap rates have risen, it should remain resilient in the coming quarters. A deep dive into a uniquely positioned subsector, Arbor’s Small Multifamily Investment Trends Report Q1 2023, developed in partnership with Chandan Economics, analyzes the competing headwinds and tailwinds influencing investment performance.

The small multifamily sub-sector ended 2022 on a high note with originations falling just behind 2021’s peak. As economic storm clouds continue circling, small multifamily appears fortified from any reverberations that may result.

With investors now seeking inflation protection, the small multifamily sector continues to see gains. Arbor’s new quarterly Small Multifamily Investment Trends Report, published in partnership with Chandan Economics, sheds light on key trends, including firm cap rates, climbing valuations, and elevated originations, despite tightening underwriting standards.

Arbor’s Small Multifamily Investment Trends Report Q2 2022, published in partnership with Chandan Economics, takes an up-close look at a sector poised to benefit from a unique set of market forces. As cap rates compress to record lows, more buyers are pursuing inflation protection in the multifamily sector and the small asset subsector.