When I received the call last fall that my partners and I had been awarded Hillcrest Place, I was genuinely surprised. This is a fully stabilized property in a great location, with underground parking, a fitness center, and a pool; exactly the type of asset that, for most of my multifamily investing career, attracted heavy competition and, as a result, compressed returns.
In my search for strong yields, most of my past acquisitions have been value-add plays. This involves the added complexity of construction loans, million-dollar renovation projects, and little or no cash flow for the first year. It’s more work and more risk, which is why those deals need to deliver higher returns.
When a value-add operator like me emerges as the top bidder on a stabilized asset, it speaks to a broader market shift: there is less competition pursuing multifamily today.
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The past five years have been challenging for many operators. Deals acquired between 2020 and 2022 were when interest rates were 2–3%, and in hindsight, pricing was inflated by the ultra-cheap debt. As those loans now mature in a much higher-rate environment, owners are under real pressure. Let’s break down how this translates to a thinner buyer pool today:
1. Investor capital is harder to obtain
Many LPs are still digesting the results of acquisitions made over the past several years. Higher expenses, slower rent growth, insurance shocks, and refinancing challenges have caused some deals to underperform original expectations. As a result, investors have become more cautious and selective.
2. Liquidity is down
The capital recycling engine that fueled rapid portfolio growth earlier in the cycle has slowed significantly. With fewer cash-out refinances and lower transaction prices, less equity is being generated from existing portfolios. Even experienced sponsors who want to grow simply have less capital available to deploy, which directly reduces the number of active bidders in the market.
3. Sponsors are spending their time troubleshooting upcoming maturities
A meaningful portion of the multifamily market is currently focused inward. Loan extensions, refinancing negotiations, DSCR constraints, and lender conversations are consuming both time and attention. Many sponsors who would otherwise be buyers are prioritizing the stabilization and preservation of existing assets rather than pursuing new acquisitions.
4. Real estate has returned to be a “get rich slow” business
Rent growth has normalized, and interest rates are no longer compressing year after year. Returns must now be earned through disciplined underwriting, operational execution, and patience, not leverage or market tailwinds. This shift has naturally eliminated the momentum-driven buyers and short-term participants, leaving a smaller, more disciplined buyer pool.
In Summary
Taken together, these dynamics have materially thinned the multifamily buyer pool. Investor capital is more selective, liquidity has tightened, and many sponsors are focused on stabilizing existing portfolios rather than expanding them. Growth must now be earned rather than assumed. For disciplined operators with long-term capital, this environment is creating openings to acquire high-quality assets on rational terms.
-Ben Michel
Ben Michel is the founder of Ridgeview Property Group, an investment firm specializing in multifamily real estate. Register Here to be notified of available investment opportunities.