release edition [094] read time [8 minutes] Welcome to The Multifamily Download, a weekly newsletter where I provide institutional insights to help you build an exceptional Multifamily career. Forwarded this email? Subscribe here. Today at a Glance:
Q4 ScorecardIn January, I published my 10 Multifamily Predictions for 2026 inside of TMD 052. As month 10 concludes today, I wanted to review how each prediction is tracking heading into the final stretch of the year. Making public predictions isn't for everyone, but this year I had a certain conviction about what was going to unfold, so I decided to share my predictions publicly. So here is the macro backdrop against which all ten predictions are being graded. In January, the consensus was that a new Fed chair would arrive in May and walk the Fed Funds Rate down toward the neutral rate, or lower. But, that is the opposite of what happened. Kevin Warsh turned hawkish as the Fed unanimously hiked in September and then held at 3.75 to 4.00% on October 28, in a split vote where two members still wanted to go higher (per the FOMC statement). A year ago the market was pricing rate cuts. Instead we got a hike and a "higher for longer" posture that almost nobody envisioned after years of admittedly "modestly restrictive policy" according to Jerome Powell (March 2026, page 9). And yet the apartment fundamentals have quietly done roughly what I thought they would. Yardi Matrix data through September shows rents up 0.3% for the third quarter and 1.4% year to date, with occupancy up 50 basis points since January (Yardi Matrix, Oct 7 report). The recovery I predicted would show up in the back half of the year did finally arrive, but with a much less friendly rate environment sitting on top of it. Here are each of the 10 predictions (graded as Confirmed, Tracking, or Too Early) with the current data behind each one. 1. Leasing mirrors 2025 in reverse. Confirmed. I said the year would run backward, with a soft first half and a firmer second half, with rents bottoming late in Q2 and turning up in Q4. That is close to what happened. Q3 closed with rent and occupancy both gaining (Yardi Matrix) as the market turn arrived roughly on schedule. 2. Rent growth compresses versus 2025. Tracking. National rent is tracking to finish just above 1% for the year (Yardi Matrix), with the spread between the best and worst markets still wide, but compressing. Fourteen of the top thirty metros were still negative year over year in September, led by Austin, Houston, Denver, Tampa, and Boston. The compression is happening, and the map still looks exactly as bifurcated as I expected. 3. Renewals outpace new-lease growth. Confirmed. This has held all year. Renewal increases have led new-lease trade-outs in most markets, and renewals are carrying the bulk of leasing activity (RealPage). When it costs a resident more to move than to stay, they stay. 4. Resident retention up year over year. Tracking. Retention is running near record levels again (RealPage). As concessions burn off and renewing stays cheaper than moving, the stickiness I expected is showing up in the turnover numbers. 5. Sales volume up as distress materializes. Tracking. Third-quarter commercial real estate volume jumped 71% year over year to $210.7 billion, and multifamily led at $114.1 billion (MSCI Real Assets, via Colliers). But, about 61% of that multifamily figure was the AvalonBay–Equity Residential merger, one entity-level deal. Strip the merger out and single-asset multifamily sales actually has fallen 12%, with prices down 4.6%. The distress-driven transaction wave I expected underneath it is still more of a trickle than a flood. 6. The yield curve will be volatile. Confirmed. I expected bond-market frustration to hand patient buyers a few openings. We got the volatility I anticipated through the Iran War, along with a hawkish Fed and a September hike (FOMC, Oct 28). The 30-year Treasury has traded above 5% through much of 2026, which it had not seen since before 2008. 7. A.I. goes mainstream in CRE. Confirmed. It's safe to say that, broadly speaking, 2026 has been the year of A.I., and that includes the Commercial Real Estate sector. While many are using LLMs to varying degrees, I'm confident that both firms and individuals know how critical and consequential A.I. is becoming for the future. 8. Syndicator struggles go public. Confirmed. The clearest tell is in the data. Multifamily CMBS delinquency hit 8.04% in September, up 145 basis points in a year, and for the first time since the Covid shutdowns the multifamily rate is now higher than the overall CMBS rate (Trepp). Apartments, the asset class that many considered "safe" just a few years ago, is now seeing distress rise the fastest. (And to be clear, this is largely capital stack distress, not asset-level distress). 9. Operators scale down, not up. Tracking. The move toward middle-market deals is happening, mostly in conversation and pipeline rather than closed volume. I am considering this one as Tracking until the transaction data catches up to the proverbial water cooler chatter. But I do fully anticipate that institutional investors will find ways to scale down into the middle-market segment eventually. 10. A frozen for-sale market hurts lease-ups. Confirmed. Existing home sales ran at a 3.99 million annualized pace in September (NAR, via Mortgage News Daily), still near the lowest levels in three decades, with mortgage rates back around 7%. The lock-in effect I have written about since TMD 005 has not loosened. Summary Six of the ten predictions are confirmed, four are still tracking in the direction I called, and none of the ten has flipped against my prediction. My thesis heading into this year was simple: fundamentals improve slowly, capital markets would be volatile, and distress would show up on the debt side before it shows up in the sale comps. Actionable Takeaway Watch prediction 5 into year-end. If single-asset volume and distressed trades start climbing while prices keep sliding, that is your signal the 2027 buying window is opening. It's never too early to begin working on your 2027 investment thesis or theses. October RecapOctober was a busy month and chances are that you missed a few of my LinkedIn posts. So here’s a roundup of my 6 most popular LinkedIn posts from October. p.s. The LinkedIn algorithm doesn't show you everything I post, so let me know if this monthly recap format is something you'd like to see going forward? 1/ Where Millennials rent vs. own (and what it tells us about demand) Visual Capitalist mapped 108 U.S. metros. In Los Angeles, 69% of Millennials rent, and buying the median home now takes roughly $215K of household income. A cluster of Utah and Midwest metros runs almost the opposite way. I pulled out the three regional patterns that decide where renter demand actually holds up. 2/ The supply gap just hit its narrowest point since 2015 Renters absorbed almost as many units as developers delivered last quarter, and effective rents turned positive year over year for the first time since early 2025. Then the 10-year Treasury closed at 5.31%. Five observations from RealPage’s Q3 report, including the two markets I’d watch first as turnaround signals. 3/ The metros that built the most have the weakest rents (in one chart) ApartmentIQ charted the 53 largest metros: how much each built since 2023 against rent growth today. The 14 that built the most are sitting at +0.1% median rent growth. The 14 that built the least are at +3.8%. But supply doesn’t explain all of it. San Antonio and Kansas City built almost the same amount and ended up eight points apart. Click here to read my 4 takeaways. 4/ The cushion operators leaned on for three years is fading Yardi’s September report carried good news (the first positive third quarter since 2022) and a quieter warning underneath it. Renewal growth has slowed to 1.7%, down from an 8.7% peak in early 2023. Here’s why that one number matters more than the headline, plus the five things I flagged. Click here to see the breakdown. 5/ Apartments are 22% off peak. The spread says that’s no discount. Measured against the 10-year Treasury, multifamily cap rates are paying about 118 basis points today. The average since 2010 is roughly 290. So buyers are earning less than half the usual premium to take on all the risk of owning. I laid out the only three ways that spread resolves from here. 6/ “Worse than the GFC?” The post that pulled 1.8M views A property management exec who oversees roughly 150,000 units laid out what he’s seeing across Class A, B, and C, plus the lenders quietly choosing not to foreclose. It’s the bleakest ground-level take I’ve read all year. I shared the full thing and asked people where they agree and where they don’t. Click here to read it and weigh in. Which of these was your favorite? Hit reply & let me know. Let's PartnerAfter 315K+ impressions and 1,800+ post engagements in October, I have decided to open up a few LinkedIn partnership spots to promote teams, brands, companies, and/or products to my LinkedIn audience. This partnership post went live 48 hours ago and already has 42K+ impressions and 350+ post engagements. If you have an interest in partnering, reach out and we'll explore if it's a good fit. Weekly ListenThis week's listen is “CRE Market Outlook: Risks & Opportunities” on The Walker Webcast, where Willy Walker brought in Aaron Appel, Kris Mikkelsen, and Ivy Zelman for a broader market conversation. They get into the $1T multifamily refi wave, why deals are still closing with no price cut, and where rents and housing head next, with Zelman making the case that rental housing is the one part of housing actually improving. This episode is a great way to hear about capital markets, debt, and housing all in one sitting. You can listen to the full episode here. Wrap UpThat's it for today. I hope you found this edition of The Multifamily Download insightful. Consider sharing this link to The Multifamily Download with a friend or colleague. Your feedback is appreciated, so feel free to reply anytime. Thanks for reading. See you next week! Forwarded this email? Sign up here. Join me on LinkedIn | X | Website |
The Multifamily Download · October 31, 2026
My 2026 Predictions Scorecard & October’s Best
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