Top Markets for Multifamily Investment in 2023

Multifamily investment sharply dropped in 2023, after two years of outstanding performance. The high cost of capital led to a pause in activity across the U.S., seriously denting sales volumes. In this context, we’re taking a look at what the top markets for multifamily investment were last year, leveraging Yardi Matrix data.

On the national level, investors acquired a total of $69.4 billion in multifamily assets last year, which was a drop to less than half from the $206.9 billion recorded in 2022. More than 439,000 units traded in 2023, down 63.3 percent from the 1.2 million units that changed hands a year prior. Likewise, the average price per unit dropped 10.7 percent year-over-year, to $187,744. Here are the top markets for multifamily investment in the country in 2023.

1. Dallas

Clocking in at number one among our top markets for multifamily investment in 2023 was Dallas-Fort Worth, with $4.2 billion. Volume was down to less than half the $10.5 billion recorded in 2022 and to just over one quarter of 2021’s $15.6 billion, in line with nationwide trends of softening activity.

The Metroplex remained a powerhouse of multifamily demand in 2023, as robust job growth and a heavy supply pipeline attracted investors. A total of 183 properties changed hands last year, encompassing 39,887 units, at an average $151,108 per unit. This price was 12.7 percent lower than the average of last year, as well as 19.5 lower than the U.S. figure.

Looking at quality segments, investors preferred value-add plays, with 105 RBN assets (19,452 units) changing hands for $1.7 billion, at an average price of $115,592 per unit. Meanwhile, 75 Lifestyle properties (20,163 units) traded for a total of $2.5 billion, with the per-unit average at $196,196.

Post Investment Group acquired the largest asset that changed hands last year. The company picked up the 696-unit Oak Forest property from Carroll Organization in March. The buyer benefitted from a $104.3 million CMBS loan, provided by Computershare CMBS and originated by Walker & Dunlop.

2. Atlanta

Atlanta’s sales volume was $3.7 billion in 2023, down to less than a third of the $12.3 billion recorded in 2022 and to less than a quarter of 2021’s $16.4 billion. Investors continued to show confidence in Atlanta’s fundamentals, with the metro recording a decade-high number of completions and steady job growth and coming in as the number two spot on our list.

A total of 100 transactions closed in Atlanta last year, encompassing 19,629 units. The average price per unit dropped only 3.6 percent, to $196,139, above the U.S. rate. Atlanta investors showed a slight favor to the upscale segment, as 54 transactions were of Lifestyle properties (13,290 units) and 46 were RBN (6,339 units). These traded at an average $234,101 and $121,835 per unit, respectively. Prices for Lifestyle assets dropped by about $20,000 year-over-year, while RBN ones were down by roughly $30,000.

Goldrich & Kest closed on the largest transaction in the metro last year. The company bought the 340-unit NOVEL Midtown Atlanta for $151 million from Crescent Communities. The recently completed asset traded at roughly $444,117 per unit and was subject to a $77 million Fannie Mae CMBS loan.

3. Phoenix

Rounding out the top three was Phoenix, another mainstay of multifamily and commercial real estate performance over the past couple of years. In 2023, investors in the metro traded $3.2 billion in multifamily assets, down 71.5 percent year-over-year. As was the case most major metros, Phoenix’s performance cooled off in 2023 after several years of outstanding performance.

A total of 51 transactions closed in the metro last year, comprising 11,423 units. The per-unit average price was down 10.6 percent to $289,302, significantly above the U.S. figure. Investors purchased 32 Lifestyle assets (8,558 units) for an average of $320,292 per unit, and 19 RBN assets (2,865 units) for $197,076 per unit.

The largest transaction closed in September. Fairfield Residential paid $161.5 million for the 332-unit District at Scottsdale, in North Scottsdale, Ariz. Kohlberg Kravis Roberts & Co. sold the property at roughly $486,445 per unit.

4. Chicago

Chicago investors bought $2.6 billion in multifamily assets in 2023, across 73 transactions and 14,479 units. This was a significant decline from the $4.0 billion recorded in 2022, but, as opposed to other metros, Chicago’s volume did not drop as dramatically.

The average price per unit reached $207,465—above the U.S. figure. This price was an increase of roughly $20,000 year-over-year, which was atypical, as most metros saw a decline in prices as well. A total of 30 Lifestyle assets (5,255 units, $1.6 billion) traded for an average of $300,755 per unit and 43 properties (9,224 units, $993.7 million) changed hands at $141,783 per unit.

Ponte Gadea closed on the largest transaction in the metro last year. The company acquired the 492-unit tower at 727 W. Madison St. for $231.5 million from Ares Management, for 470,528 per unit.

5. Denver

Denver’s investment volume totaled $2.5 billion in 2023, down 48.5 percent year-over-year. A total of 45 transactions closed, encompassing 7,266 units—nearly half of the 13,960 units that traded in 2022. The average price per unit was $320,997, which was virtually unchanged year-over-year.

In 2023, Denver investors traded $1.9 billion in 27 Lifestyle assets (4,994 units), at an average per-unit price of $341,150. A total of 17 RBN transactions (2,272 units) were recorded, generating $609 million, at an average price of $282,099.

The largest transaction in the metro last year was the $123.5 million sale of the 310-unit Vue West Apartment Homes by Crescent Real Estate. Buyer Sequoia Equities paid $398,387 per unit and financed the deal with a $71.1 million CMBS loan.

MG Properties was another active buyer in the metro last year, adding three new properties to its portfolio. In October, the company paid $95.3 million for the 316-unit 4400 Syracuse Apartments.

6. Boston

Clocking in at number six, metro Boston recorded a total of $2.5 billion in sales, which was down 27.8 percent year-over-year. Investors traded 28 properties—encompassing 5,370 units—last year, at an average of $429,169 per unit, which was more than double the national average.

Investors favored the upscale segment in Boston as well, with 17 transactions of Lifestyle assets (3,397 units) totaling nearly $2 billion. The average price per unit for Lifestyle sales was $517,830, one of the highest in the nation. Meanwhile, a total of 11 RBN assets traded (1,973 units) for a total of $545 million, at $276,517 per unit on average.

Besides being the metro’s largest transaction last year, Brookfield Properties’ $439 million acquisition of Church Park was also one of the largest in the nation. Boyd Smith sold the 508-unit asset at roughly $864,173 per unit.

Another significant deal in the metro was Goldman Sachs’ acquisition of Hanover North Cambridge for $182 million. The company purchased the luxury asset through one of its funds at roughly $619,047 per unit.

7. Miami

Miami investors generated just under $2.5 billion last year, down 61.4 percent year-over-year. A total of 48 assets changed hands, encompassing 9,755 units, down to less than half of the 23,921 units that traded in 2022. The average price per unit was $266,828, significantly above the U.S. figure e, but 19.3 percent less year-over-year. The metro also ranked first as the most competitive rental market in early 2024.

A total of 6,721 units in Lifestyle assets changed hands for a total of nearly $1.8 billion, across 25 properties. The average price per unit for these was $290,381. Investors also traded 2,944 units in 19 RBN properties, at an average of $217,393 per unit and a total of $622.4 million.

The largest investment in metro Miami last year was the $289 million sale of Southgate Towers in the Miami Beach submarket. AIR Communities bought the 495-unit asset from Gumenick Properties for about $583,838 per unit.

8. Washington, D.C.

The nation’s capital clocked in at number eight among the top metros for multifamily investment, with a total of $2.2 billion, which was 66.5 percent less than the $6.6 billion recorded in 2022. A total of 44 transactions closed, comprising 9,785 units that traded at $261,684 per unit.

The number of units that traded was evenly split between quality segments. A total of 29 RBN properties traded, encompassing 4,866 units, for a total of $858 million, while 14 Lifestyle assets, or 4,919 units, changed hands for $1.3 billion. Per unit prices stood at $204,467 and $318,819, both rates above the respective U.S. averages.

AIR Communities also closed on the largest transaction in Washington, D.C. last year. It acquired The Elm in downtown Bethesda, Md., for $220.3 million from Carr Properties. The 2021-completed, 456-unit asset traded at $482,962 per unit.

9. Charlotte, N.C.

Charlotte, N.C., investors closed on 50 transactions—9,545 units—last year for a total of $1.9 billion, down 64.8 percent year-over-year. The average price per unit was down 9.8 percent year-over-year, to $223,421.

A total of 24 Lifestyle transactions, totaling 6,592 rental units, closed for a total of $1.6 billion in the metro last year. These traded at an average of $259,877 per unit. The remaining 26 transactions—2,953 units—were of RBN properties, amounting to $317.5 million. The average price of RBN properties was at $125,531 per unit.

Sterling Equities acquired the 300-unit Ascent Uptown for $137.9 million from Greystar, which was the largest transaction in the metro last year. The asset traded for $459,666 per unit.

10. Tampa-St. Petersburg, Fla.

Finishing off the top 10 metros for multifamily investments ranking was the Tampa – St. Petersburg area with a total of $1.9 billion across 50 properties, yet another significant decline from the 88 sales and $4.7 billion of 2022.

Investors spent an average of $197,224 per unit, down 13.3 percent year-over-year. Investors were focused on value-add plays, having closed on 29 transactions involving RBN assets, encompassing 5,423 units. These changed hands for an average of $146,884 per unit. Meanwhile, a total of 17 Lifestyle transactions were recorded, totaling 4,679 units at an average price of $262,355.

At 331 units and a $96 million price tag, Azora at Cypress Ranch in the Land O’ Lakes submarket was both the largest property and the largest transaction recorded in the metro last year. Carter-Haston Real Estate Services acquired the asset from NRP Group with the help of a $53.4 million loan, provided by New York Life Insurance Co.