Hello Friends and Investors,

The first month of 2025 is already behind us, and if January was any indication, this year will be one of both challenges and opportunities in the multifamily space. Last week, Bryan and Tyler attended the NMHC 2025 Annual Meeting, where the industry’s top leaders connected & shared insights on capital markets, operational trends, and the outlook for multifamily investments. Amid shifting economic conditions, our strategy remains clear: prioritize operational excellence, disciplined acquisitions, and investor transparency.

NMHC 2025 Takeaways: Key Trends to Watch

The National Multifamily Housing Council’s annual gathering is a great way to meet with many of our partners, team and prospects and gain an even greater real-time pulse on where the industry is headed, to the benefit of our existing and prospective partners. We had a full slate of meetings with regionally focused brokers, lenders, institutional equity investors and leading service providers over the course of 3 days in Las Vegas. Some major takeaways include:

• Transaction Volume Remains Slow: Investors and sellers remain disconnected in the current market and transactions have been extremely muted over the past two years, as we all know very well, since the historic rate hiking cycle began. While there's a sense of optimism we're "turning the corner" and transaction activity will pick up this year, most of the industry's leading sponsors, equity investors, and brokerage shops expect 2025 transaction volume to be somewhat similar to the conditions of 2024. The major determinant factors will be whether or not interest rates actually do come in, and how lenders engage from a macro level as it relates to the wall of pending maturities. We continue to believe that we are in a "window of opportunity" and investments that pencil in this environment will prove to be very strong in the long term context.
• Capital Markets Tightening: Equity and debt markets remain constrained, but pricing adjustments are opening opportunities for well-capitalized investors. All the while, there remains a tremendous amount of equity seeking quality multifamily investments in our region.
• Operational Efficiency is Critical: With revenue growth moderating, operators must focus on expense management and value creation through technology and hands-on management.
• Supply & Demand Imbalance: While new supply is set to peak in 2025, development pipelines are slowing due to financing hurdles, which could lead to supply shortages in 2026 and beyond. This is expected to lead to further improving fundamentals on existing apartment communities.

Midwest Market Intel: Stability & Opportunity

The Midwest continues to demonstrate resilience amid economic uncertainty, with fundamentals that support long-term multifamily investment.

• Rent Growth Holding Steady: Midwest metros saw an average 3.2% rent increase in January, outperforming many Sunbelt and coastal markets.
• Occupancy Rates Strong: Key markets like Indianapolis (95.1%) and Louisville (94.8%) continue to show demand stability.
• Cap Rates Widening: Midwest cap rates are moderately adjusting in response to interest rate uncertainty, creating compelling acquisition opportunities.

We remain focused on leveraging these advantages to drive long-term value for our investors. 

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Speaking Engagement & Team Growth

• CCIM KY & Louisville Apartment Association: Tyler will be speaking on an expert panel covering Multifamily Real Estate Financenext week at the 2025 Real Estate Economic Outlook presented by CCIM KY and the Louisville Apartment Association, sharing insights on capital structuring, the current economic climate and impact of interest rates and more in today’s market. If you'd like to attend, please register here.

2025 Real Estate Economic Outlook

Tuesday, February 18th

8:00a - 11:30a

The Jeffersonian

10617 Taylorsville Rd.

Louisville KY 40299, US

• CF Capital Team Expansion: We are continuing to strengthen our team, with a focus on enhancing property management capabilities and scaling our investment platform to maximize operational efficiency.
• New CF Capital Website: We are pleased to announce the completion of our new Corporate Website which was launched alongside our participation in NMHC. If you look carefully at the top of the email, you get a peek at the new home page. To see the full site: Click Here

We expect continued volatility in capital markets, but with that comes strong buying opportunities for those who are patient and disciplined. As always, we remain committed to executing our investment strategy and keeping you informed along the way.

Thank you for your trust and partnership—let’s make February a great month!

In Partnership,

Tyler Chesser & Bryan Flaherty Co-Founders & Managing Partners, CF Capital