Market Trends

April 25, 2023

3 takeaways from the latest Multifamily Outlook Report

3 takeaways from the latest Multifamily Outlook Report

We’re pleased to announce the release of our highly anticipated Multifamily Outlook for the first half of 2023. As always, the report is full of insights from our seasoned team of commercial real estate professionals and clients/partners in the multifamily space.

The report includes:

  • A look at the current economic outlook
  • An insightful investment sales market intelligence update
  • An interesting interview on the hot topic of ESG in the multifamily space
  • A deep dive into the LA market
  • A strong focus on the affordable housing crisis

Here are three of our top takeaways from the report.

1. 2023 will be a balancing act for the economy

No one can deny that the past year has been a tumultuous one for the U.S. economy. Low interest rates and a strong labor market resulted in the highest inflation rates in 40 years by February of 2022, leading to a period of monetary tightening.

The bank instability that erupted in March 2023 served as a good reminder of some of the risks that accompany periods of monetary tightening. Although the Federal Reserve installed an enhanced lending facility to bring confidence back to the market, risks of further instability remain.

Despite that, there is some good news. The labor market remains strong, and consumer finances are relatively healthy. It’s likely that higher interest rates will lead to tighter credit conditions, which should, in turn, bring down inflation as effects trickle down through the economy and labor markets.

For more analysis of the overall economy, check out the section of our Multifamily Outlook entitled “The Balancing Act: Monetary Tightening and the Market Ahead.”

2. CREUnited narrows the diversity gap in CRE

Over the years, Walker & Dunlop has observed firsthand an industry-wide problem: the lack of diversity, equity, and inclusion for minority and women-owned firms in commercial real estate.

In one recent study of 2,930 CRE pros, 60 percent of respondents reported that their workplace was “not very” or “not at all” diverse. Further, only 16 percent of respondents reported that one-quarter or more of professionals in their workplace were minorities. Another study reported that minority firms had only 5 percent of assets under management, and women-owned firms had even less, at just 2.5 percent.

CREUnited, an alliance of major industry leaders and women and minority-owned businesses, is dedicated to increasing women and minority representation in commercial real estate—and it’s moving the needle on diversity.

Read a case study from CREUnited that showcases what can be done when we all work together to transform the industry. Also, learn about what lies ahead for CREUnited in the coming year when you check out the section of the Multifamily Outlook entitled “Tackling the Diversity Gap in Commercial Real Estate Head-On.”

3. Applying ESG principles in multifamily is good for the planet and good for business

Addressing climate change, considering the social impact of projects, incorporating DEI initiatives, and aligning corporate structures with environmental and social initiatives has now become a top priority for investors.

That’s because it’s both good for the planet and good for business. From an investor or owner perspective, applying ESG principles can reduce operating costs and also attract more institutional capital. Over the long term, ESG investing can deliver slightly better risk-adjusted returns.

To learn more about ESG investing, we talked with Bob Simpson, President of the Multifamily Impact Council, and Richard Randall, CEO and Co-Founder at Echelon Energy. Explore their insights in the section of the Multifamily Outlook entitled “Helping Investors Understand How to Apply ESG Principles in the Multifamily Space.”

These three takeaways are just a small sampling of the insightful information available in the Multifamily Outlook. Download your complimentary copy to discover much more.

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