Hello Friends and Investors,

As Q2 begins, the multifamily market continues to navigate a dynamic landscape. While the Federal Reserve has maintained its cautious stance on rate cuts, signs of capital markets thawing are beginning to emerge. Meanwhile, rent growth is stabilizing, transaction activity is slowly increasing, and operational efficiency remains a top priority for investors and operators alike.

At CF Capital, fresh off our quarterly offsite leadership meeting, we are laser-focused on identifying high-quality acquisition opportunities, optimizing portfolio performance, and maintaining a disciplined investment approach. Here’s what’s shaping our outlook this month:

1. Multifamily Market Update: Signs of Momentum

• Interest Rates & Capital Markets: The Fed is still signaling potential rate cuts later in the year, which could provide tailwinds for transaction volume in the second half of 2025.
• Rent Growth Holding Steady: Nationwide rent growth sits at 2.9% YoY, with Midwest markets continuing to lead, averaging 3.6% growth year-over-year.
• Lender Sentiment Improving: Debt markets are beginning to show more flexibility, with certain lenders re-engaging and offering competitive financing for well-structured deals.

2. Midwest Multifamily Insights: Strength in Stability

The Midwest remains one of the most stable and attractive regions for multifamily investment, particularly in this phase of the cycle.

• Occupancy Stability: Markets like Indianapolis (95.3%) and Louisville (95.0%) continue to outperform national averages.
• Affordability Advantage: With homeownership affordability still strained due to high mortgage rates, rental demand in Midwest markets remains strong.
• Acquisition Window Opening: Sellers are gradually adjusting pricing expectations, creating a more favorable environment for disciplined buyers with long-term capital.

Our focus remains on sourcing value-add opportunities where we can maximize operational efficiencies and drive sustainable cash flow.

3. CF Capital Updates: Momentum & Growth Initiatives

• Strategic Refinancing Initiatives: We are actively working on a few refinances across our portfolio to strengthen our capital structure and position select properties for longer-term holds. This ensures stable cash flow while allowing us to take advantage of a more favorable market cycle for future sales.
• Expanding Investor Engagement: We are implementing new reporting enhancements to provide greater insight and clarity into portfolio performance.
• Operational Efficiencies: Our asset management team is driving NOI growth by improving expense management and increasing revenue through targeted value-add strategies.

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Looking Ahead

With the economic landscape evolving, our approach remains focused, disciplined, and opportunity-driven. While capital remains selective, we expect increasing transaction activity in Q2 and Q3, positioning us well for strategic acquisitions and portfolio enhancements.

As always, we appreciate your trust and partnership. If you’d like to discuss opportunities or have any questions, feel free to reach out!

In Partnership,

Bryan & Tyler