Amid ongoing macroeconomic uncertainty, the small multifamily sector remains favorably positioned for stability as the structural need for affordable housing in the U.S. has supported the strength of the sector’s demand profile.
Nationally, vacancies have risen, but the performance of rental housing is extremely localized. Out of the 75 largest U.S. metropolitan areas, the occupancy rate for all types of rental properties, including single-family rentals, 2-4 family, multifamily, and mobile homes, increased in 36 markets last year, while exceeding 95% in nearly one-third of all markets, according to an analysis of newly released U.S. Census Bureau data.[1] From Grand Rapids, MI, to Columbia, SC, the top markets for rental occupancy show where conditions are tightest and demand is strongest.
Arbor’s Single-Family Rental Investment Trends Report Q1 2025, published in partnership with Chandan Economics, is an up-close look at the single-family rental (SFR) sector as it enters a period of normalcy after explosive pandemic-era growth. SFR maintains its balance with the support of a healthy set of fundamentals while capital markets rebound and rent growth moderates.
Small multifamily price growth trends indicate a stabilization may be ready to take hold. Expanding on the findings of Arbor’s latest Small Multifamily Investment Trends Report, our research teams more closely examined valuations to determine if trends in pricing and other fundamentals are supporting a turnaround.
Elevated mortgage interest rates and high home prices boosted demand for single-family rentals (SFR) last year, supporting the growth of rents in almost all of the 100 largest metropolitan areas. Pricing momentum, which averaged 4.5% nationally, was concentrated in affordable markets in the Northeast and Midwest, an analysis of Zillow’s Observed Rent Index data shows.
Increasingly, single-family rental (SFR) operators have been relying on build-to-rent (BTR) development to satisfy their inventory needs. The popularity of BTR communities made economies of scale possible for the SFR sector in the recovery after the 2007 housing crisis and continues to fill a housing need nationwide. Now, newly released U.S. Census Bureau data shows that SFR development activity remained robust even as its momentum slowed, moving the sector into a more stable equilibrium.
With political headwinds reshaping the corporate responsibility landscape, commercial real estate (CRE) leaders, policymakers, and academics recently gathered in New York City for the NYU Stern Chen Institute for Global Real Estate Finance’s 3rd Annual Symposium on Innovation & Sustainable Real Estate to discuss the future of sustainable real estate finance, investment, operations, and technology. In a series of panel discussions, industry leaders offered their perspectives on how sustainability is evolving in a new political environment and why green policies still make business sense.
Rental housing remains uniquely positioned for continued growth in an environment of economic volatility and political uncertainty, Dr. Sam Chandan, founding director of the C.H. Chen Institute for Global Real Estate Finance at the NYU Stern School of Business and founder of Chandan Economics, asserts in his video overview of Arbor’s Special Report Spring 2025.
Arbor remains committed to the responsible environmental management of our operations as well as providing opportunities for our borrowers to improve their own footprints. We are an active participant in our agency partners,’ Fannie Mae and Freddie Mac, “green” lending programs, supporting borrowers with funding to make improvements to their properties that help reduce energy and water consumption and lower utility costs to tenants. See success stories from these programs on our Success Stories page.
In our own offices, we are working to identify ways to reduce consumption and our environmental footprint. This exploration involves an analysis of our workspaces and business practices, our vendor and counterparty practices, and the carbon footprint of our lending practices. We believe that the key to keeping our focus on sustainability is an ongoing investment in our people, continuous and broad-based education, and a flexible approach to our policies and processes.
Arbor has continued its domestic and international tree planting program, aimed at supporting two highly successful reforestation efforts through a commitment to plant a tree on behalf of Arbor’s customers for each loan we close. This initiative provides a valuable opportunity to connect with our clients while actively contributing to a critically important environmental cause. To date, in recognition of our closed transactions, and our commitment to these critical organizations, Arbor has financed the planting of 17,000 trees domestically and 3,400 trees in the State of Israel.
In our workspaces across the United States, Arbor has installed low-flow water systems in bathrooms, energy-efficient LED lighting, daylight and occupancy sensors in all new office buildouts and retrofits, and hands-free faucets. All equipment is set to energy reduction modes, including computer and copier equipment. Arbor shows preference for green leased buildings for one-off offices and purchases ENERGY STAR appliances when available.
Arbor maintains effective recycling processes (supplies, electronics, paper files), where available, to increase landfill diversion and to be in compliance with all building rules and regulations. We utilize e-signature and electronic invoices and statements and encourage digital-only subscriptions and eco-friendly packaging solutions.
In 2024 Arbor conducted a Greenhouse Gas (GHG) Inventory though a third-party partner. The inventory covered scopes 1 and 2 emissions of office spaces under the company’s operational control during the year 2023. In 2025, we expanded the inventory to include scope 3 emissions. This inventory will be Arbor’s baseline year of emissions and will allow the company to track future emissions and create goals and plans for reductions.
Many of the practices we already have in place support the reduction of our carbon footprint, such as our energy management initiatives, which reduce our Scope 2 emissions. We also have a telecommuting policy that allows our employees to work from home utilizing video conferencing for calls. Employees also have access to our Qualified Transportation Expense Program (QTE), which allows employees to open and contribute to a pre-tax account for eligible transportation funds, including public transportation. Both options incentivize reduced use of fossil-fuel transportation, therefore lowering our carbon footprint.
Arbor is in full compliance with environmental regulations in all our office locations and requires the same of the properties on which it lends. We are actively preparing for current and upcoming regulatory requirements for GHG emissions and climate-related disclosures at the state level.