One month in at La Serena and the team has already covered a lot of ground. Hermiston 17 is also delivering results above original projections. Here is the full update.
The headline that matters most this month: national multifamily vacancy dropped to 7.2% in June, its first sustained decline since late 2021, according to Apartment List's June report. After peaking at 7.3% in February, the vacancy rate is finally moving in the right direction as the record 2023-2025 delivery wave begins to be absorbed. Rent growth is still soft, with year-over-year effective rents running around 0.8% nationally and the June median ticking up 0.4% to $1,385. The correction has not been evenly distributed: supply-constrained and Midwest markets are already seeing renewal leverage, while oversupplied Sun Belt submarkets like Austin and San Antonio continue to set the market with concessions. Class B and C assets are weathering this cycle better than Class A, which represents 85% of all new deliveries, per Scotsman Guide data through Q1 2026.
On the supply side, completions are contracting. CoStar and Apartments.com project new deliveries down 28% in 2026 to approximately 382,000 units, followed by another 24% decline in 2027. That pipeline shrinkage is the structural setup patient value-add investors have been waiting for, with most forecasters expecting demand to outpace new supply by mid-2027. The practical question for any specific acquisition is not whether multifamily is stabilizing nationally, it is how many more quarters of deliveries a given submarket has to absorb before rents inflect.
The Fed held rates steady at 3.50%-3.75% at its June 16-17 FOMC meeting, a unanimous vote under new Chair Kevin Warsh. But the tone shifted. Warsh removed forward guidance on cuts entirely, and the updated dot plot showed nine of 19 policymakers expecting at least one rate hike before year-end, with the median funds rate projection rising to 3.8%. A softer-than-expected June jobs report (57,000 nonfarm payrolls vs. a 110,000 forecast) has since pulled hike odds back, and the July 28-29 FOMC meeting is widely expected to produce no change. Still, the message from the Fed is clear: financing costs are not moving lower anytime soon, and a hike is squarely on the table. Asset-level execution and NOI growth remain the primary levers.
EagleCap is actively sourcing its next acquisition, filtering and underwriting deals weekly across the Houston and DFW MSAs, with a focus on 1980-2005 vintage assets. The team is also working to expand its institutional, family office, and large multifamily investor partner network. If you have relationships or capital that may be a fit, we would welcome the conversation.
When investors think about value-add returns, they usually focus on rent bumps. But on older workforce housing assets, expense reduction can move NOI just as fast, and with less execution risk. Utility costs, especially water and sewer, are frequently the largest controllable operating expense on a 1970s-era property. Replacing aging toilets, showerheads, and faucet aerators property-wide is a high-ROI capital item because the savings are immediate, recurring, and do not depend on lease-up or market conditions.
The math is straightforward: reduce water consumption per unit, cut the monthly utility bill, and that dollar of savings flows directly to NOI. At a 6% cap rate, every $1,000 of annual NOI improvement adds roughly $16,700 of property value. A full plumbing retrofit completed in week two of ownership, as done at La Serena, is not just a maintenance upgrade. It is a fast, measurable step toward the exit valuation. Operators who treat expense management as seriously as rent growth tend to outperform on both stabilization speed and ultimate sale price.
The first post-close site visit to La Serena confirmed strong early momentum. In the first month of operations, the team has completed new WiFi and high-speed internet installation, camera systems, and landscaping, with interior unit renovations and exterior painting, now underway. These are the visible signals to residents that ownership has changed and standards have risen.
The most consequential early action was a full property-wide water conservation retrofit executed by SAS Plumbing in week two. Every toilet, showerhead, and faucet aerator across all units was replaced. The projected reduction in water and sewer expense is expected to produce a meaningful, immediate boost to NOI and corresponding property value. Getting this done in the first month, rather than over many quarters, reflects the operating pace EagleCap targets from day one on every acquisition.
Hermiston 17 has reached full stabilization with average 2-bedroom rents at $1,350, above original proforma projections, with additional units still coming online. Distributions are being processed for investors at the end of Q2 2026. If you have not set up ACH on Homebase, a physical check will be mailed to you. A refinance or sale is targeted for later in 2026, and more specific timeline updates will follow as options are evaluated.
La Serena's business plan is in motion and Hermiston 17 is outperforming. The team is actively sourcing the next deal in Texas while keeping a close eye on the July 28-29 FOMC meeting and summer leasing data as vacancy continues its early descent. As always, if you have questions about your investment, want to explore a new opportunity, or know a partner who would be a good fit for EagleCap, reach out directly.
