Top 12 Multifamily Predictions for 2024

Experts deliver their detailed expectations, from adaptive reuse to Gen Z.

Asked to gaze into their crystal balls and forecast trends for the next 12 months, multifamily experts weighed in on everything from financing to fitness centers, access control to adaptive reuse and Gen Zs to EVs. When all was said and done, we winnowed our list to a dozen fearless forecasts for 2024’s multifamily field.

Coffee Lounge, CoSociety Orlando

Coffee Lounge, CoSociety Orlando. Image courtesy of Baker Barrios Architects

1. Rents high, occupancies stable

The mix of high mortgage rates, tight home inventories and other factors will mean potential home buyers will confront headwinds affording a home purchase. So, with multifamily residents staying put for longer, rents will remain elevated, said Mary Le, an economist at Moody’s Analytics.

LISTEN TO: Multifamily Needs Stability to Start 2024 Strong

“Rising rents are expected to disproportionately impact low- and moderate-income households in securing housing,” Le told Multi-Housing News. Added Frank Grosch, senior vice president at AGM Financial Services, “Occupancies will remain solid. The large number of units delivered in the past few years will continue to be absorbed at a steady pace.”

2. Production reduction

Image by Stefan Lenz/iStockphoto.com

Construction financing is expected to fall in 2024, potentially slowing multifamily projects. “Much of this is due to high interest rates meant to curb inflation, though this macroeconomic strategy will ripple through the construction and development sector, influencing the trajectory of multifamily projects on a national scale,” said Michael Lee, principal & partner at HKS Real Estate Advisors in New York City.

In New York City, the absence of the 421a tax abatement will make multifamily projects less viable, but it will also provide impetus for more innovative solutions, Lee observed.

3. Below replacement cost

According to Roberto Casas, senior managing director & multi-housing group leader with JLL Capital Markets in Dallas, the emphasis among investors in the new year will be on buying below replacement cost. “Nationally, core assets in favorable locations are being priced 25 to 35 percent below replacement costs,” Casas said.

“This pricing trend remains consistent across most markets, with minimal variations, indicating the widespread pricing displacement across regions. This dynamic is anticipated to cause a further slowdown in urban supply pipelines.”

4. Senior Living Boom

2850 Webster Ave., a new senior housing community adjacent to the New York Botanical Garden. Image courtesy of Douglaston Development

2850 Webster Ave., a new senior housing community adjacent to the New York Botanical Garden. Image courtesy of Douglaston Development

Trendsetters since birth, baby boomers will continue to be in 2024, said Jeffrey Levine, founding principal and chairman of Douglaston Development in New York City. The first boomers are nearing their mid-80s, prime age for independent and assisted living, Levine said.


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“This sector has been devastated over these past three to four years due to Covid, and the effect of high interest rates on the sale of homes,” Levine noted. “The need is apparent, and I believe the senior living business will have its best years in the near future.”

5. Hotel-inspired wellness

Multifamily communities will incorporate hotel-inspired health and wellness design, from tranquil green spaces to state-of-the-art fitness centers, smart technology and biophilia.

“This increased need is driven by … changing lifestyle preferences, a growing awareness of health and wellness and the impact of the COVID-19 pandemic to create spaces that promote a balanced, wellness-focused lifestyle,” said Sonya Haffey, principal at multidisciplinary South Florida-based interior design firm V Starr.

6. Finding the best buyers

Given that raising equity is more difficult in the current environment, it’s more vital than ever for multifamily property sellers to select buyers with discretionary equity and a track record record of making it to the closing table, said Dan Price, senior vice president of MLG Capital in Brookfield, Wisc. “To target the best buyers and surety of execution, many sellers may choose to sell off-market or through a quietly marketed sale process so that they are dealing with those buyers who meet those qualifications,” he said.

7. Maximizing experiences

With luxury dominating among the many apartment buildings opening their doors in the past year, luxe multifamily operators need to stand out from rivals to drive NOI. That means they will have to adopt innovative approaches in providing unique resident offerings, said Lisa Yeh, president of Sentral, a national property management company.


READ ALSO: Why Hotel-Branded Residences Are a Hit


“We’ll also see operators taking a page from hotels by creating enhanced, curated, memorable experiences, anything from exclusive food-and-beverage events to concierge services,” she said. “Consumers have more choices than ever, so creating sticky experiences is more important than ever.”

Multifamily operators will offer residents more amenities that support health and wellness, such as saunas and steam rooms, which are offered at Icon Marina Village in West Palm Beach, Fla. Image courtesy of The Related Group

8. Proptech consolidation

The multifamily industry continues to swiftly adopt myriad technology solutions. But that presents an issue: How to ensure the varying systems are not redundant and efficiently complement one another?

Therefore, the new year could bring increased focus “on developing a unifying ecosystem to address disparate software applications,” said Joya Pavesi, executive vice president of marketing and strategy for Charlotte, N.C.-based property management firm RKW Residential. “A unified ecosystem would not only streamline workflows but also enhance data visibility and accessibility, making operations more efficient and primed for intelligent, data-driven decision making.”

9. Cup o’ joe

Coffee lovers rejoice. Architects and designers predict growing inclusion of coffee bars in apartment buildings. Baker Barrios Architects, for instance, incorporated a bespoke coffee/tea bar in its Society Orlando, in downtown Orlando.

“A well-designed coffee bar creates a striking focal point that appeals to people of all ages,” said Baker Barrios multifamily practice leader Brad Lutz. Added Mary Cook, founder & president of Chicago-based national interiors firm Mary Cook Associates, “Coffee is a social lubricant. When executed with good design, coffee-focused spaces can catalyze resident interaction throughout the day and support work-from-home productivity.”

10. The right mix

Recognition will continue to build that the most vibrant, dynamic communities are those that are multigenerational and socioeconomically diverse, with a broad array of socialization opportunities, amenities and services, according to Brian Pilot, AIA, LEED AP, principal at STUDIOS Architecture‘s Washington D.C. office.

A number of firms are designing rich, mixed-use communities that embrace not just residential, commercial and retail spaces, but blend in food and beverage, entertainment, performing arts and green space.


READ ALSO: What to Expect for Senior Housing in 2024


11. Supply-demand reversal

The construction pipeline of multifamily deliveries in early 2024 should exert a negative impact on Class A rents as supply outpaces demand near term, said Justin Shay, managing director, multifamily investment sales for Miami, Fla.-based BermanCRE.

He believes this will be short-lived, as construction starts slowed in 2023 and should continue to slow in 2024. “The impact of the lack of new construction starts will not be felt until 2025 and 2026,” he said. “This may turn out a positive for existing owners as a slowdown in deliveries will help tighten submarket vacancy and increase rents.”   

Icon Marina Village, V Starr. Image courtesy of The Related Group

Health and wellness offerings that promote a balanced lifestyle, such as massage rooms, will become more popular. Image courtesy of The Related Group

12. Adaptive reuse on the rise

Sustainability consciousness, along with cost issues, will foster continued growth of adaptive reuse as a prevalent design and construction movement in multifamily, said Eric Greenfield, real estate division chair at Polsinelli Law Firm. The redevelopment of old warehouses, factories, schools, office buildings and other assets into multifamily will persist among developers in 2024 and beyond.

Read the January 2024 issue of MHN.

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