Hello Friends and Investors,

As we step into March, the multifamily landscape continues to evolve in response to shifting economic conditions. The Federal Reserve remains cautious on rate cuts, keeping capital markets tight, while operators are doubling down on efficiency, tenant retention, and cost management. Despite challenges, opportunities are emerging, especially in well-positioned secondary markets like the Midwest.

With Q1 nearing its close, we remain focused on strategic acquisitions, operational improvements, and disciplined execution to maximize value for our investors. Let’s dive into key updates for this month.

Market Overview

Multifamily Market Update: The Road Ahead

• Capital Markets Remain Restrained: Debt remains expensive, but select lenders are increasing activity for well-structured deals with strong fundamentals.
• Rent Growth Normalization: National rent growth is hovering around 2.8% YoY, with Midwest markets outperforming at 3.5%, reinforcing our investment thesis.
• Supply & Demand Shift: While new deliveries are peaking, a steep drop-off in new development starts suggests a tightening market in late 2025 and 2026, presenting strong upside potential for existing assets.

Midwest Market Intel: Stability & Strategic Opportunities

• The Midwest remains a stronghold for multifamily investment due to its affordability, job growth, and resilient demand. Key updates:
• Occupancy Holds Strong: Indianapolis (95.2%) and Louisville (94.9%) continue to show high renter demand despite national headwinds.
• Acquisition Environment Improving: Seller expectations are adjusting, with price discovery continuing to trend in favor of buyers with long-term capital.
• Cost Containment is Key: Insurance premiums and operational expenses remain a focus, reinforcing the need for hands-on asset management.
• At CF Capital, we are actively evaluating new acquisitions where we can create value while maintaining our disciplined underwriting approach.

In the News

U.S. Cap Rate Survey H2 2024
Cap rates continue to hold steady, with trends varying across sectors and strategies. Sales volume is expected to trend upward during 2025.

Apollo to Privatize Bridge Investment Group for $1.5B
Apollo Global will acquire Bridge Investment Group for $1.5B, effectively taking the massive multifamily and industrial portfolio private.

What We're Reading

The Self-made Billionaire Effect: How Extreme Producers Create Massive Value
by John Sviokla & Mitch Cohen

Scores of top-tier entrepreneurs worked for established corporations before they struck out on their own and became self-made billionaires. People like Mark Cuban, John Paul DeJoria, Sara Blakely, and T. Boone Pickens all built businesses—in some cases, multiple businesses—that are among today’s most iconic brands.

CF Capital Updates

Speaking Engagements & Growth Initiatives

• Speaking Engagements: Tyler recently had the opportunity to speak on the CCIM Multifamily Real Estate Finance panel, sharing insights on capital structuring in today’s evolving market.
• Investor Reporting Enhancements: We are rolling out new visual reporting elements to improve clarity and insight into portfolio performance.
• Operational Focus: Our team continues to refine management strategies to improve efficiency and enhance cash flow across our portfolio.

Looking Ahead

With rate cuts still on the horizon (and a potential trend developing in the Treasuries), we expect capital markets to gradually unlock liquidity later this year. Until then, we remain focused on long-term fundamentals, operational efficiency, and sourcing high-quality investment opportunities.

Thank you for your continued trust and partnership—we look forward to an exciting year ahead!

In Partnership,

Tyler Chesser & Bryan Flaherty

Co-Founders & Managing Partners, CF Capital