Multifamily REITs expecting income drop in 2026 + will transaction volume grow this year?

Hey there,

I hope you had a great weekend!

Every other Monday, I send out a roundup of the most relevant multifamily news and insights, curated from the perspective of both an operator and a passive investor.

Here's what stood out to me this week

Apartment landlords are bracing for another tough year in 2026, with major multifamily REITs like Mid-America, Equity Residential, and AvalonBay all projecting declining or near-flat net operating income as expenses continue to outpace rent growth. The culprit is a familiar one — operating costs are climbing anywhere from 2.7% to 3.8%, while rent growth is barely moving, leaving landlords squeezed from both sides. Investor sentiment has followed suit, with multifamily REIT returns down 7.8% over the past year, trailing nearly every other real estate sector.

The silver lining, if there is one, is that new supply is dropping sharply, deliveries are down more than 60% from their recent peak, and with homeownership still out of reach for many, renewal rates and rent-to-income ratios are trending in landlords' favor heading into the back half of the year. Camden Property Trust made headlines by announcing plans to exit California entirely, citing regulatory headaches and a preference for Sun Belt markets where they see better long-term growth potential.

Cautious optimism was the dominant mood at January's National Multifamily Housing Council meeting, where Walker & Dunlop surveyed 118 industry executives and found that most believe 2026 will bring more construction and investment activity to the sector. Nearly 80% of respondents expect apartment construction to increase or hold steady, and over 62% anticipate multifamily acquisitions to grow, which would mark the third straight year of volume increases.

On the rent growth front, the Sun Belt and Northeast tied as the regions most expected to outperform, though analysts are quick to note the Sun Belt still has a supply overhang to work through before that optimism fully materializes. Macroeconomic sentiment was more of a coin flip, with just over half of respondents expecting conditions to improve and nearly 45% taking the opposite view. One wildcard worth watching is Trump's nomination of Kevin Warsh as Fed chair — industry leaders are hopeful that if confirmed, his tenure could bring lower rates and a more development-friendly environment.

After a turbulent stretch for commercial real estate, multifamily cap rates stabilized in the second half of 2025 — and according to CBRE's latest survey of over 200 capital markets professionals, that's a sign the market may have finally found its footing and entered a new cycle. Most respondents believe yields have hit their cyclical peak, and the mood is shifting, with a growing share of investors now expecting cap rates to hold steady or compress in the months ahead. Transaction volume is already reflecting that improved sentiment, climbing roughly 19% last year, and the lending environment is becoming more borrower-friendly with higher loan-to-value ratios and more lenders entering the mix.

Looking further out, survey respondents named multifamily as the commercial real estate sector most likely to outperform all others over the next decade — a notable vote of confidence given the near-term NOI pressures landlords are currently navigating. The broader takeaway: while the day-to-day operating picture remains choppy, the investment case for multifamily is quietly strengthening.

We've essentially taken the same long-term, simplistic approach to developing our investor relationships. Obviously, a successful track record is the critical component of this process that isn't explicitly mentioned; building this makes the rest of the process significantly easier.

In this episode, I sat down with Levi Allen and Joe Rinderknecht, the co-founders of Cowboy Capital, to talk through the kind of real estate journey that doesn’t get shared enough. We start with their very first deal—a tough project that nearly sank their business—and how they worked through it using transparency, accountability, and constant communication with their investors. That early experience shaped how they operate today and laid the foundation for the strong investor relationships they’ve built since.

We also get into some great deal stories, including a Montana acquisition that doubled in value within a year, and the principles that guide every decision they make. Levi and Joe break down how they think about preferred equity, alignment, and why “running out the bad news and walking out the good” has been one of the most powerful tools in their capital raising playbook. This conversation is a great reminder that long-term success in this business comes from trust, simplicity, and doing right by your investors—especially when things don’t go as planned.

You can also listen to this episode on Spotify.

We just closed on four duplexes in Nashua, NH, bought within the NH Multifamily Fund III. We closed on these with a nice margin - the combined purchase price was $1,735,000, and the "as-is" appraisal values came in at $2,129,000.

We've made incredible progress since launching the fund in July 2025. Since then, we've raised ~$3M, closed on 8 deals totaling 72 units, and we're moving quickly. We continue to find great deals in the smaller, inefficiently priced segment of the market. It's historically been challenging for LPs to invest in these smaller deals on a one-off basis due to administrative and legal costs, but our fund provides our investors with access to these deals.

We're closing the final round of funding on 3/1. You can access the deal room here or watch the webinar recording at this link.

** This is a Reg 506(c) offering, available to accredited investors only.

If you’re enjoying the newsletter, the best way to support it is simple: share it with someone who’d find it valuable—another investor, operator, or anyone looking to learn more about multifamily real estate. Your word of mouth makes a huge difference.

Software we use to run our real estate business:

Note: Some of the links above are affiliate links.