Multifamily Real Estate Outlook 2026
Despite challenges, HUB International's James "Chip" Stuart sees bright spots for multifamily owners and operators.
Real estate owners and operators today are navigating one of the most complex operating environments in recent memory.
As elevated interest rates, changing tenant expectations and staffing challenges converge, nothing can be taken for granted. Vacancy rates underscore the challenge: As of November 2025, the national multi-family vacancy rate was as high as 7.2 percent, a record level that has left many real estate owners and operators uncertain about the future.
Driving Success Through Strategic Changes
Despite the challenges, however, there are some bright spots for real estate owners and operators in the multifamily sector. Savvy real estate leaders are embracing several important changes in order to achieve success.
Rather than holding underperforming assets, owners are increasingly converting them into mixed-use properties that combine residential, retail and public space. Whether it’s an older office space or even a shopping mall, these spaces can be revitalized to better align with today’s urban and suburban lifestyles—and stabilize cash flow and attract new tenants at the same time.
LIKE THIS CONTENT? Subscribe to MHN’s Finance & Investment Newsletter
In addition, the talent shortage has arrived at a critical juncture. Roughly 40 percent of facilities managers are expected to retire this year, intensifying competition to fill the roles. While technology and automation can help, they cannot fully replace an experienced professional. To remain competitive, multi-family owners will need to rethink compensation, invest in training and career pathing, and offer more personalized benefits.
Formerly expensive insurance premiums have come down, a trend that is expected to continue through 2026. Yet not everyone will benefit from the downward trend, and owners and operators will need to demonstrate that they are deserving of the lower price point. Underwriters will favor owners with well-maintained properties, clearly evaluated risk exposures and risk-mature portfolios.
Investors are also sharpening their focus on risk management. Advanced analytics and AI-driven tools are being used to evaluate data, looking for assets that can withstand a variety of physical and financial challenges. The data is used to support better decision-making to benefit stakeholders across the industry.
Move your organization forward
To succeed in this environment, multifamily real estate owners and operators will need to take intentional steps to protect their investments and adapt to tenant and client needs. Consider these best practices:
- Focus on Risk Maturity: Economic uncertainty and a growing number of outside factors have increased overall risk for multifamily owners and investors. Consider increasing the deductible on your insurance policy to reduce the premium and improve your experience rating. Some are also switching to alternative risk transfer vehicles.
- Don’t Forget Safety Concerns: Large buildings like multifamily structures are at greater risk of seeing nuclear verdicts. Work on prevention by including regular training for your employees. Adding new risk management practices, such as increased security and a focus on compliance, can also save money over time.
- Analyze Major Losses: Underwriters will be looking to make sure you’re prepared. Look closely at any large historical losses to understand what happened and be sure you can explain how and why you’re better prepared this time around.
- Strengthen Benefits Offerings: With so few experienced professionals available, real estate organizations may have difficulty attracting and retaining employees, but those that offer personalized benefits and opportunities for growth will have the advantage. Focus on identifying the right data to determine how personalization can better support your employees.
As a risk management expert, your broker can help guide you in all these areas. In addition, real estate owners and investors who stay in regular contact with their brokers will find that those brokers are better prepared at renewal time. Those who begin the renewal process at least 90 days ahead of time will be able to identify the best options and guide you toward success.
James “Chip” Stuart is the corporate chief sales officer & practice leader for global insurance brokerage Hub International’s real estate specialty in North America.
