Why Investors Remain Bullish on the Mid-Atlantic Market

CBRE’s Michael Muldowney and Peyton Cox on the region's multifamily investment landscape.

Richmond. Image by Stephen Poore via Unsplash.com

A year like no other. Those few words could sum up the U.S. multifamily market’s performance in 2021, with multifamily transactions hitting $198 billion, more than double 2020’s total and a solid 55 percent more than 2019’s pre-pandemic high, according to a recent Yardi Matrix multifamily report.

In line with national trends, the Mid-Atlantic multifamily market had a strong performance throughout 2021, fueled by constant demand and strong economic activity. While some metros performed better than others, the whole region saw betterment across the board, with investment levels rising especially in the fourth quarter.

Two experienced CBRE executives shared their thoughts on the Mid-Atlantic multifamily investment market with Multi-Housing News. Executive Vice President Michael Muldowney is part of the firm’s Mid-Atlantic Multifamily Investment Properties team, while Peyton Cox serves as vice president with CBRE’s Southern Virginia multifamily team.

READ ALSO: Amazon Commits $160M to Virginia Affordable Housing

In the past 12 months, what Mid-Atlantic metros have been the most attractive to investors and why?

Cox: The Southern Virginia region as a whole has had some of the strongest fundamentals of the Mid-Atlantic region, with the Richmond and Virginia Beach markets being the leaders. This is due to a combination of post-COVID-19 trends that include the Millennial and general population migration south from the Northeast gateway markets, as well as the stable economy which proved to be one of the most resilient multifamily markets nationally in 2020.

Richmond was ranked first and Virginia Beach ranked eighth in the country, per a CBRE index that rated market performance that included rent growth and vacancy. Another factor that has helped increase Virginia’s investor interest and support higher asset pricing is that Virginia has been the first state to get rent relief program dollars distributed to property owners.

In a post-COVID-19 world, the diversity of Southern Virginia markets like Richmond and Hampton Roads checked all the boxes for a dependable market with diverse employment, including some stable government sector jobs, and a high quality of life attractive to digital nomads in the new remote work paradigm.

What sets Richmond apart from the other major Mid-Atlantic markets? What can you tell us about multifamily investment activity across the metro?

Michael Muldowney, Peyton Cox. Images courtesy of CBRE

Cox: Richmond punches above its weight on a per-capita basis and had been overlooked by larger investors for years, as they skipped over Richmond for markets like Raleigh, N.C., and Washington, D.C. Richmond has seven Fortune 500 companies, is the state capital and has a tremendous Eds & Meds driver with VCU powering the economy. So, you get a great quality of life from a work, education and recreation perspective, but with the low cost of living and the ability to get anywhere in 15 minutes, which makes for a unique offering not found in the more traditional, densely populated markets.

Richmond also is in the middle of a transition from a sleepy, local and regional investor and developer base to a much more competitive national and even international group of players that are bringing institutional-level capital, ideas and management to this market that raises the bar and benefits everyone.

In 2021, Baltimore saw significant migration from expensive coastal markets. In your opinion, what attracted people to this particular metro?

Muldowney: Baltimore’s booming industrial, shipping and logistics sectors were large drivers behind the 69,500 new jobs that were added to the metro in 2021. In addition, Feds, Meds and Eds are constant drivers, and resilient to exogenous forces such as the COVID-19 pandemic or financial downturns.

Besides the more prominent metros, were there any smaller cities in high demand?

Cox: Charlottesville and Williamsburg, Va. These are both smaller markets with strong university and tourism offerings that are attractive to empty nesters and Millennials.

Please tell us a few details about your investment activity across the Mid-Atlantic last year. Were there any notable transactions?

The Millennium at Metropolitan Park in Arlington, Va.

The Millennium at Metropolitan Park. Image courtesy of Burns Architectural Products

Muldowney: In 2021 alone, the team completed $5.2 billion of sales transactions, including six prominent portfolio sales. One of the team’s more notable and high-profile transactions of 2021 included the sale of the Barcroft Apartments, a 1,334-unit multifamily community in Arlington, Va., which is one of Arlington County’s largest affordable housing complexes. Jair Lynch acquired the property which is now set to be preserved for 99 years with the help of $310 million in loans from Amazon.com Inc. and Arlington County.

Other notable transactions include the sale of the MD-5 portfolio, consisting of workforce housing communities comprising 1,646 apartments and 1,395 townhomes, known as Commons at White Marsh, Cove Village, Fontana Village, Harbor Point Estates, and Whispering Woods; as well as the sale of The Millennium at Metropolitan Park—an apartment building located directly across from where Amazon’s first HQ2 buildings are under construction in Pentagon City.

How do you expect the Mid-Atlantic multifamily investment market to evolve in 2022?


  • Sales volume will exceed 2021 numbers by 10 percent to 15 percent.
  • Construction costs escalate and climb throughout the year, in excess of 10 percent to 15 percent, which will put stress on the ability to make deals in the majority of markets. With the rise in costs, as rent growth subsides, the result is a decline of new starts in the range of 15 percent for the year.
  • Alternative lenders such as debt funds and mortgage REITs will continue to step up and get more aggressive in 2022.
  • The ongoing economic recovery, job creation, wage growth, household formation and the eventual reoccupation of workplaces will support multifamily demand in 2022. Strong occupancy and rent growth have attracted rising investor activity in the Mid-Atlantic from a variety of capital sources including both debt and equity, leading to a record volume of sales transactions in 2021. Rent collections and emergency renter relief policies will remain a factor that affects lender underwriting and investment activity going forward.

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