Spring is here, and we have real progress to report. Here is what is happening across the portfolio and in the broader market right now.
Summary
- The Avenues renovation: Unit 3 is complete and unit 2 is underway. One unit left before all 17 are fully renovated.
- Rent growth at The Avenues: A two-bed unit has been pushed to $1,320/month, up from the previous ceiling of $1,250, with more increases planned.
- The Avenues NOI positioning: Additional units are being moved toward the $1,300/month range ahead of a potential refinance or sale later this year.
- Pasadena 172: The 172-unit Houston deal has reached final Fannie Mae approval. A limited number of investor slots remain.
- Market context: National multifamily vacancy sits at 7.3% as elevated supply works through the system, but the new construction pipeline is contracting sharply.
- Fed holds steady: The federal funds rate remains at 3.50% - 3.75% following the March meeting, with one potential cut still penciled in for late 2026.
- Equity volatility: Stock market turbulence tied to the war in Iran and geopolitical uncertainty continues to highlight the value of non-correlated, cash-flowing real estate.
Market Update
Supply Peaks, the Fed Holds, and Equities Stay Choppy
The multifamily market is working through the tail end of a historic supply wave. National rents ticked up just +0.4% in March month-over-month, leaving year-over-year growth at -1.7%. The national vacancy index currently stands at 7.3%, and units are taking an average of 38 days to lease after being listed, five days longer than a year ago. The pressure is heavily concentrated in oversupplied Sun Belt metros. Class A luxury properties have faced the highest vacancy rates, while affordable workforce housing has maintained tighter occupancy and more stable rent performance in most metros.
The pipeline is the key forward indicator. Approximately 415,000 units are projected to begin leasing in 2026, down from roughly 455,000 last year and from the nearly 600,000-unit peak in 2024. With construction starts slowing meaningfully, markets can anticipate improved rent growth and tighter occupancy conditions as completions ease, particularly in metros where overbuilding was cyclical rather than structural. The supply correction is real; it just takes time to show up in the numbers.
On rates, the FOMC voted 11-1 to hold the federal funds rate at 3.50%-3.75% at its March meeting. Despite the elevated uncertainty, officials still signaled they expect rate cuts ahead, with the dot plot pointing to one reduction this year and another in 2027. For real estate borrowers, the near-term message is clear: financing costs are not moving lower quickly, making asset-level cash flow and NOI management more important than ever.
Investor Opportunities
Pasadena 172: Final Approval Stage, Limited Slots Remaining
The Pasadena 172 acquisition in Houston is moving through its final step of Fannie Mae approval. The deal has progressed smoothly through underwriting, and we are in the home stretch of the approval process.
This deal has been extremely popular, with just over $3MM of the about $4MM total investor slots taken in the first month they were available. We have approximately one month left in the timeline, and a limited number of investor slots remain for those who are eligible and interested. Reach out if you want to learn more about how we make owning your own apartment building simple and attainable.
*This is for informational purposes only and is not a solicitation or offer to invest.
Investor Insights
What NOI Optimization Actually Looks Like Before a Refinance
One of the most direct ways to increase a multifamily property's value before a refinance or sale is to push net operating income (NOI) higher. Since multifamily properties are valued based on a capitalization rate applied to NOI, even a modest rent increase across several units can translate into a meaningful jump in appraised value.
At The Avenues, this is exactly what we are doing. By completing renovations on the final units and moving rents toward the $1,300-$1,320/month range on two-bedroom units, we are systematically building a stronger income picture before we approach a lender or buyer. The math is straightforward: more NOI equals a higher value at the same cap rate. This is why renovation sequencing, tenant repositioning, and rent-to-market discipline in the months before a capital event matter so much. Execution in the final innings of a hold period is where real value gets captured.
Deal Activity
The Avenues: One Unit Away from a Complete Renovation
The Avenues (17 units, Hermiston, OR) is nearly at the finish line. Unit 3 has been renovated and unit 2 is currently underway. Once unit 2 is complete, all 17 units will have been fully renovated.
Alongside the physical work, we have been strategically moving tenants to unlock better-performing units. The result: a two-bedroom unit has now been leased at $1,320/month, above the previous ceiling of $1,250. Additional two-bedroom units are being targeted toward the $1,300/month range. The goal is a clean, fully renovated, higher-income property positioned for a refinance or sale later this year.
Looking Forward
Between The Avenues wrapping up renovations, Pasadena 172 clearing its final approval hurdle, and a market environment that is rewarding disciplined operators, we are entering the spring with real momentum. If you are curious about the Pasadena 172 opportunity or want to understand why we think multifamily is a great bet even in a volatile market, we would be glad to connect. Reach out any time.
Schedule a call with our team