Apartment investment activity lost ground in August, but analysts say there are signs of renewed momentum beneath the surface.
According to data shared by MSCI Real Assets with Multifamily Dive, total apartment transaction volume declined 8% year over year to $12.5 billion. Yet in contrast to the broader pullback, deals involving individual properties rose 11% YOY to $11.2 billion, a metric experts often view as a stronger indicator of sector health.
The drag came largely from the portfolio side. Portfolio transactions plunged 64% YOY to just $1.3 billion, a steep drop that weighed down overall numbers. The comparison is amplified by one major deal the previous year: in August 2024, KKR acquired 19 purpose-built student housing assets from BREIT for approximately $1.64 billion, accounting for nearly half of that month’s total volume. Even excluding that transaction, activity would have still registered a decline.
On the pricing front, MSCI’s Real Capital Analytics commercial property price index for multifamily inched up 0.2% YOY, signaling stabilization after a period of steady decline. One year ago, property values were falling at a 6% annual rate. Cap rates, meanwhile, have held flat at 5.5% since August 2024, underscoring continued pricing discipline.
Mid- and high-rise buildings totaled $5.9 billion in August sales, down 3% from last year. However, individual trades in this segment surged 39%, buoyed by standout deals such as the $810 million sale of 800 Fifth Avenue in New York City.
Garden-style properties logged $6.5 billion in activity, a 13% YOY decline, largely due to fewer portfolio-level trades.
Despite the month-to-month softness, large operators say interest is building behind the scenes.
“Transactions have been very slow in real estate over the last couple of years, and, you know, dating back to early 2022,” said Dan Byrnes, CEO of Seattle-based Security Properties. But he noted a sharp uptick in appetite from major investors.
“It [their interest] has not been stronger at any point in the last several years,” Byrnes said. “We’re seeing pretty universally strong interest across our investor pool. All of them are actively looking for multifamily deals right now.”
Many in the industry believe the Federal Reserve will play a central role in unlocking pent-up capital. The central bank’s quarter-point rate cut earlier this month was welcomed, but investors are hoping it's just the beginning.
Pete O’Neil, national director of research at Northmarq, said deeper cuts could accelerate the rebound.
“If rate cuts succeed in supporting faster economic growth and job expansion, that could also translate to stronger renter demand,” O’Neil said in emailed comments to Multifamily Dive. “A boost to operational fundamentals would, in turn, positively impact values.”
He added that rate reductions extending into 2026 would likely support both underwriting confidence and transaction velocity.
While overall sales remain below pre–rate hike levels, analysts say the uptick in single-asset deals and investor interest points to improving sentiment heading into fall.
Industry observers expect that as borrowing costs ease and pricing expectations realign, more buyers and sellers will return to the table—potentially lifting transaction volume in the coming quarters.
Originally reported by Leslie Shaver in Multi Family Dive.
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