Berkadia Report: How Emerging Trends Are Impacting Investor Sentiment
The midyear survey found optimism for next year, even while uncertainty slows current transaction volumes.
Interest rate volatility, market uncertainty and difficulty securing capital and equity are among the key challenges cited by multifamily investors in a new Berkadia survey of principal or executive-level investors at private and institutional companies assessing expectations for the second half of 2025 and beyond.
Conducted just days after President Donald Trump revealed a list of global tariffs in early April that rocked stock and capital markets, the 2025 Mid-Year Multifamily Investor Pulse Survey notes the challenges are compounded by concerns over tariffs and legislative changes. However, the poll results also showed optimism for next year and plans by a majority of investors to continue moving forward with dispositions this year.
While first-quarter transaction activity was up 36 percent to $21.6 billion compared to $15.8 billion in the same quarter last year, it was off the peak levels of 2021 and 2022. Fifty percent of the investors surveyed reported seeing less deal activity due to market volatility as the recent slowdown in the capital markets has caused investors to wait for the volatility to settle down. And nearly half of the respondents (45 percent) reported the volatility has changed their investment outlook for the second half of 2025.
Josh Bodin, senior vice president of securities trading at Berkadia, said the volatility in the rates market is depressing transaction activity and a sustained period of lower volatility and stability will be needed to spark the market.
“The market very much demonstrated last year how quickly it can pivot when given favorable financing opportunities and favorable rate environments,” Bodin told Multi-Housing News. ”So I think that if we do see that turn, if we do see that pivot, we would see transactions really boom.”
One bright spot for the remainder of the year was 74 percent of survey respondents reporting they are continuing with planned dispositions despite the current volatility. The report cites several possible reasons, including a buildup of transactions postponed by the interest rate climate, loans that must be refinanced or properties sold, and what it calls “the relative stabilization of values.”
Bodin called that statistic a “very positive part of the report.” He attributed some of it to the hard maturities coming up in the so-called wall of maturities and the liquidity in the debt capital markets.
“You have $146 billion of potential GSE volume supporting the multifamily market. We’re seeing rebounds in CRE CLOs, SASBs and CMBS. The debt fund activity is strong,” he told MHN. “Maturities are going to play an important role in feeding the volume this year. But for the acquisitions and dispositions to really get ramped up, we go back to that question of stability for a sustained period of time.”
Improving investment climate
Another interesting data point in the survey was that 63 percent of all respondents now believe the investment climate will improve by the first half of 2026. Bodin said that’s a positive shift because less than 35 percent of respondents polled earlier in the year for the firm’s 2025 outlook survey expected improvement by the first half of 2026. The majority at that time did not anticipate improvement until the latter part of 2026.
For this year, 46 percent of the respondents expect investment transactions to be higher in 2025 than 2024. About 35 percent expect activity to remain the same. The report notes the optimism is underpinned by the resilience of the multifamily sector as well as a significant amount of dry powder waiting to be deployed.
Despite the current uncertainty and challenges, investors seem very excited by the strength of multifamily. Bodin said the market is “buoyed by such strong fundamentals.”
“While the post-Liberation Day (when Trump released the tariff plan) market volatility has put a bit of a damper on the current environment, that negative bias hasn’t manifested itself in terms of disposition plans, transaction expectations or investor outlook,” he noted.
