🔐 Where apartment hunting became impossible in 2025

👋 Hello, Best Ever readers! 

In today’s newsletter, rentals get competitive, developers pivot, students default, Giannis buys in, and much more.

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Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

🏦 Another Cut: The Fed cut interest rates yesterday by 25 bps to 3.5-3.75% in a divided 9-3 vote, marking the third consecutive cut but signaling just one more reduction expected in 2026 as internal disagreements and political pressure complicate the path forward.

🏗️ Buy Now, Build Later: Multifamily developers have shifted from ground-up construction to acquisition mode, as buying existing apartments at 5.75-6.25% cap rates beats building new projects penciling at 6.5%. Firms like Bozzuto have raised $330 million in funds to deploy $1 billion in purchases.

☀️ Sun Belt Slowdown: The Sun Belt faces mounting multifamily pressure as population growth tapers and oversupply persists, with metros like Austin posting negative rent growth while the region transitions from pandemic-era migration boom to market normalization and slower demographic gains.

🎓 Loan Crunch: Student loan delinquencies among renters more than doubled from 15% in January to 32% in May 2025, pushing formerly qualified applicants into lower credit tiers and forcing property managers to rethink screening criteria as fraud risks climb alongside financial stress.

🏨 Texas Advantage: Texas hotels shine as the bright spot in a struggling national hospitality market, with DFW leading growth through population gains, corporate relocations, and mixed-use development despite six years of stagnant revenues and construction cost pressures nationwide.

🏆 TOP STORY
WHERE APARTMENT HUNTING BECAME IMPOSSIBLE IN 2025

Finding an apartment got noticeably harder in 2025. The national Rental Competitiveness Index climbed to 75.2 — up from 74.4 in 2024 — as renters stayed put at record rates and new construction slowed across most metros, according to RentCafe's annual analysis of 139 major markets.

The tight conditions stem from a straightforward supply-demand imbalance. Despite more than half a million new apartments delivered nationwide, lease renewals jumped to 63% (up from 62.2% last year), pushing occupancy to 93.3% and keeping competition fierce. Vacant units still attract nine interested renters on average and fill within 41 days — just one day longer than 2024.

Here's what's happening across the nation's hottest rental markets:

• Most Competitive: Miami maintains its grip as America's most competitive rental market, where nearly three-quarters of renters renewed leases in 2025, leaving fewer than 4% of units available. Each vacancy now attracts 19 interested renters (up from 18 last year) and leases within 33 days.

• Midwest Powerhouse: Chicago and its suburbs emerged as the Midwest's leader, claiming the No. 2 and No. 3 spots nationally with RCI scores of 88.2 and 88.1. Lease renewals climbed to 61.1% (up from 59.2%), driving occupancy to 95.1%. The Windy City now leases apartments faster than any other major metro — typically within 32 days, two days quicker than last year.

• New York Rising: Manhattan cracked the top five for the first time, ranking fourth with an RCI score of 84.5. Despite a modest 0.84% increase in supply, two-thirds of Manhattan renters renewed (up from 64.7% in 2024), pushing occupancy to 95.9%. Applicants per vacancy jumped from eight to 11, and apartments now lease in 36 days — down from 40 days last year.

Regional competition intensified across the board. The Northeast topped the rankings with an RCI of 80.6, followed by the Midwest (80.3) and Florida (79.5). The Suburban Twin Cities posted the year's biggest jump — RCI rising 9.2 points to 82.1 — as new construction plummeted from 5.18% of inventory to just 2.45%. San Francisco saw the second-largest increase (RCI up 7.4 points to 72.8) as AI hiring and return-to-office mandates fueled demand while new supply dropped from 3.11% to 1.43%.

Among smaller metros, Fayetteville, AR, claimed the top spot, with apartments leasing in just 22 days — the fastest in the country. Port St. Lucie, FL, emerged as the fastest-rising small metro, with RCI jumping 12.5 points to 86.9 as new apartment supply collapsed from 12.86% to 2.63%.

THE BOTTOM LINE

The 2025 rental landscape reflects a structural shift toward supply constraints that will persist into 2026. While summer will bring a modest wave of new apartments — adding roughly 1.29% to inventory — construction is projected to plummet to 0.47% by year's end. If you’re evaluating new markets, monitor those where lease renewal rates exceed 65% and new supply growth trails below 2%. These conditions create pricing power and sustained occupancy.

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💰 CRE BY THE NUMBERS
DEALS SLIP, RENTS FALL, GIANNIS BUYS IN, AND MORE

📉 $24.4 Billion 

CRE deal volume slipped in October for the first time in nearly two years as buyers and sellers hit a pricing stalemate, with $24.4 billion in sales representing roughly 70% of October 2019 levels despite multifamily posting a 27% decline from last year.

🏢 -0.18% 

National apartment rents fell 0.18% MoM in November to $1,706, marking the steepest November decline in over 15 years and the fifth straight month of flat or negative growth as elevated supply continues weighing on rent momentum across all regions.

🏀 $14.1 Million 

NBA superstar Giannis Antetokounmpo paid $14.1 million for an eight-story, 28-unit rent-regulated apartment building in Brooklyn's Prospect Lefferts Gardens as the Milwaukee Bucks star expands his CRE portfolio through his Build Your Legacy Ventures fund launched last year.

📈 90% 

Affordable housing executives show surging optimism with 90% expecting increased investment appetite in 2026, up sharply from 70% last year, while 65% already see higher capital deployment despite 70% citing tariffs and material costs as development barriers.

🏘️ DEAL OF THE WEEK
OFF-MARKET DEAL EYES 1.99X EQUITY MULTIPLE IN 5 YEARS

Reed Goossens and the team at RSN Property Group acquired this 126-unit Class B multifamily property in Gainesville, GA, at $171,000 per unit — well below replacement cost — and is projecting up to 20% IRR with a light value-add strategy.

Here's how they’re doing it 👇

🏢 Property details: Alessia Gardens is a 126-unit Class B multifamily property located in Gainesville, GA, just outside Atlanta. The property was acquired off-market in July 2025 for $21.6 million — a 32% discount to peak market pricing and well below replacement cost at approximately $171,000 per unit.

💸 Finances: The team raised $9.5 million in capital through a combination of TIC (Tenancy-in-Common) investments, direct investor relationships, and targeted online marketing. They secured Freddie Mac financing at 65% LTV with 36 months interest-only and a 5.05% fixed interest rate.

💼 Business plan: This is a light value-add strategy focused on lower-risk execution. The prior owner had operational challenges, allowing the team to acquire at a favorable basis. The property is already in good shape with $900,000+ in recent upgrades completed. The plan includes modest interior upgrades, washer/dryer installations, utility reimbursements, and small operational efficiencies to push rents by $100-$200 per unit. The projected hold period is five years.

🍾 Results: The conservative projections for investors after a five-year hold are:

• Class A: 10% preferred return

• Class B: 19% IRR | 1.95x equity multiple | 5.8% CoC

• Class C: 20% IRR | 1.99x equity multiple | 5.8% CoC

💪 Biggest Challenge: “One of the most challenging aspects of this deal was navigating the current equity-raising environment,” said Goossens. “With capital markets still tight and many investors on the sidelines, raising equity required creativity, persistence, and adaptability. Rather than relying on a single channel, we successfully completed the raise through a combination of TIC investments, direct investor relationships, and targeted online marketing strategies.

“This diversified capital strategy not only allowed us to fully capitalize the deal, but also strengthened our investor base, broadened our reach, and demonstrated our ability to execute in difficult market conditions — a critical skill in today’s environment.”

👉 If you have a deal you’d like to share with us, please email us here.