Multifamily

What is multifamily real estate?

Percentage Share of Owners and Renters by Age of Householder^iv

Who lives in multifamily rental?

Approximately half of multifamily residents are single individuals,^v with most renters skewing younger and earning under $75,000 annually. However, the profile of US renters is evolving—diversifying across both income levels and age groups—which is expected to further bolster rental demand in the coming cycle.

The Expanding Renter Base: Income and Age Diversity

By income:
While most renters earn below $75,000 annually,^vi the share of high-income renters is growing, challenging the idea that rentership is purely need-based. Between 2010 and 2023, the number of renters earning $75,000+ more than doubled,^vii with a notable rise in those earning over $100,000. While affordability challenges in the ownership market are a key driver of the rise in high-income renters, many of these households are also renting by choice. Based on our estimates, at least 22% of renters are likely choosing to rent by preference rather than necessity.^viii

By age:
While younger cohorts remain the primary driver of rental demand, we are seeing growth in older renter segments: Renters aged 55-84 grew by 42% since 2010, compared to just 7% growth among those under 55 during the same period.^ix These older renters are often drawn to the flexibility and lower maintenance responsibilities of renting, increasing demand—particularly for communities that cater to their lifestyle needs.​

What are the secular drivers of this sector?

At its core, housing demand remains largely insulated from short-term economic fluctuations. Regardless of near-term disruptions, people still need a place to live—making residential rental housing one of the more stable asset classes across market cycles. This stability creates a natural hedge against economic uncertainty, supported by several underlying demand drivers:

Demographic tailwinds: Renter demographics are not only evolving but also growing. Since the end of 2019, the number of renter households has risen by 2.9 million, reaching 46.2 million in 2025^x —further amplifying demand for multifamily housing.

Supply shortage: The supply of available housing has not kept pace with rising demand. Both single-family and multifamily construction were slow to recover after the 2008 financial crisis, and as the recent wave of new supply begins to recede, the US market remains significantly undersupplied. Our analysis estimates that an additional 2.2 million vacant units are needed to bring the national housing vacancy rate back in line with long-term historical trends.^xi With fewer new units being delivered, the supply-demand imbalance is expected to persist—supporting long-term fundamentals and sustaining rental housing demand.

Affordability: Rising demand and limited supply have intensified affordability challenges, further strengthening the case for multifamily housing. Between 2021 and 2023, 74% of new renter households were cost burdened,^xii and nearly half of all renters faced similar pressure in 2023.^xiii At the same time, the US falls short by 3.2 million affordable units needed to accommodate low- and modest-income renters.^xiv Moreover, homeownership has become increasingly out of reach, as elevated home prices and mortgage rates have significantly eroded affordability, pushing the median age of first-time buyers to an all-time high of 38 in 2024.^xv With construction and replacement costs continuing to rise, the supply of new affordable housing also remains constrained—reinforcing sustained demand for rental housing across demographics.

2.9 Million Renters Were Added Between 2019 and 2025^xvi

2.2 Million Units Needed to Balance the US Housing Market^xvii

What are the common building types?

Common multifamily building types are garden style, low-rise, mid-rise, and high-rise. Low-rise, mid-rise, and high-rise have one to three, four to six, and seven or more floors, respectively and garden style apartments tend to have between two and six floors where buildings are spread out across the property and is surrounded by landscaped areas with lawns and trees.^xviii

Across these property types, class ratings are often used to represent the quality of the property. Factors such as age of the property, amenities, location, can impact the rating. Class A normally commands higher market-clearing rents than Class B and C.

Garden Style

Low-Rise

Mid-Rise

High-Rise

What drives value at the asset level?

Identifying Value
Investment managers can drive value prior to acquisition by identifying highly sought after, in-demand renter locations with positive neighborhood characteristics, quality school systems, and proximity to jobs.

Active Management 
Investment managers can create value through executing renovations in older units, which typically involves updating amenities and unit finishes. Asset repositioning can create opportunities to drive value at the asset level while upgraded resident services can enhance resident satisfaction and brand reputation.​

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LOGISTICS

Build-to-Rent