Multifamily Development Continues Its Shift Toward Larger, Lower-Rise Communities
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2 months 1 week ago #648172
by Michael Boggiano
Multifamily Development Continues Its Shift Toward Larger, Lower-Rise Communities was created by Michael Boggiano
Multifamily construction is slowing, but the projects getting built continue to grow larger while staying overwhelmingly low-rise.
Total multifamily completions fell from 591,000 units in 2024 to 468,000 units in 2025, with the pullback concentrated in smaller properties. Completions in 5-49 unit buildings dropped 27.2%, more than the 15.8% decline in 50-plus unit properties, and buildings with 50 or more units now account for 59.4% of all completed multifamily units. But scale isn't translating into height: 60.5% of completed units in 2025 sat in buildings under four floors, a share that has held above 50% every year since 2016. The share of units with more than one bedroom also ticked up to 49.6%, suggesting some of this new supply is being built for households, not just individual renters.
For multifamily lenders, the more important takeaway is where financing demand is likely to concentrate. Deal flow will continue skewing toward larger sponsors developing suburban garden-style communities rather than smaller urban infill projects, consistent with the capital access and scale barriers documented separately by the Urban Institute. That favors agency execution through Fannie Mae and Freddie Mac for stabilized assets, while reinforcing the financing challenges smaller developers face getting projects off the ground in the first place.
Full Article:
lnkd.in/e_qDhQae
Total multifamily completions fell from 591,000 units in 2024 to 468,000 units in 2025, with the pullback concentrated in smaller properties. Completions in 5-49 unit buildings dropped 27.2%, more than the 15.8% decline in 50-plus unit properties, and buildings with 50 or more units now account for 59.4% of all completed multifamily units. But scale isn't translating into height: 60.5% of completed units in 2025 sat in buildings under four floors, a share that has held above 50% every year since 2016. The share of units with more than one bedroom also ticked up to 49.6%, suggesting some of this new supply is being built for households, not just individual renters.
For multifamily lenders, the more important takeaway is where financing demand is likely to concentrate. Deal flow will continue skewing toward larger sponsors developing suburban garden-style communities rather than smaller urban infill projects, consistent with the capital access and scale barriers documented separately by the Urban Institute. That favors agency execution through Fannie Mae and Freddie Mac for stabilized assets, while reinforcing the financing challenges smaller developers face getting projects off the ground in the first place.
Full Article:
lnkd.in/e_qDhQae
2 months 1 week ago #648172
by Michael Boggiano
