Dive Brief:
- Apartment prices in February rose year over year for the first time since 2022, increasing 0.1%, according to a report that data firm MSCI Real Assets shared with Multifamily Dive. However, sales continued to fall in February, dropping 24% YOY to $8.1 billion, according to MSCI.
- Cap rates hit 5.6% in February, an increase from the 4.7% seen in 2022, when interest rates were at record-low levels. Mid- and high-rise properties were 5.4%, while garden assets were 5.6% in February. MSCI noted that there was only a 146-basis-point spread to the 10-year Treasury in February, significantly lower than the average of 333 basis points from 2015 to 2019.
- Apartments have seen the most trades across commercial real estate since the pandemic. However, industrial is quickly closing the gap, posting $16.9 billion in sales in the first two months of 2026, compared to $17 billion for multifamily.
Dive Insight:
Even with prices improving, deals across property types haven’t stabilized yet this year, indicating a possible continued gap between buyer and seller expectations that has lingered for a couple of years.
Mid- and high-rise trades decreased 31% YOY to $3 billion in February. Garden property transactions fell 19% YOY to $5 billion. Individual asset sales, often a benchmark for sector health, fell 22% YOY to $6.9 billion, according to MSCI. Portfolio and entity-level sales dropped 31% YOY to $1.1 billion during the month.
As the year wears on, major deals, partially driven by REITs selling off apartment properties, will close and drive more activity this year.
For instance, earlier this month, affiliates of Harbor Group International agreed to acquire an 11-property portfolio, totaling 2,436 units, from REIT AH Realty Trust for $562 million in cash, subject to customary adjustments and closing conditions. The deal is expected to close in mid-2026.
Last month, Veris Residential agreed to be acquired by an investor consortium led by Affinius Capital in partnership with Vista Hill Partners in a $3.4 billion all-cash transaction. The deal is expected to close in the second quarter of 2026, subject to shareholder approval at Veris and other customary closing conditions.
For buyers looking for individual properties or smaller portfolios, the market also appears to be ripe for more deals, even if 2026 has gotten off to a slow start. Security Properties CEO Dan Byrnes told Multifamily Dive that the debt markets have been “pretty good.”
“The agencies are doing what they do,” Byrnes said. “We're big borrowers from both of them.”
Last year, Security Properties made eight market-rate acquisitions totaling nearly $700 million, including the September purchase of 903 apartments across five properties from Washington Holdings for $400.8 million.
“We were able to do very good business last year,” Dan Byrnes said. “Assuming that there's good volume in the marketplace, we think we'll capture our fair share of it, if not outperform.”
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