Author: Just Summit Editorial Team
Source: Franklin Templeton
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US multifamily real estate has been a highly attractive sector for institutional investors over the past decade, driven by its essential nature, strong property fundamentals, and historically high risk-adjusted returns. It holds a significant 29.1% weighting in the NCREIF Fund Index-Open End Diversified Core Equity (NFI-ODCE).
Key macroeconomic drivers sustaining demand include a national housing shortage, favorable demographics across generations, and ongoing affordability challenges in the for-sale housing market, making renting a more viable option in most metros. The rise in renter households and cost-burdened individuals, alongside growth in Sun Belt regions and suburban areas, further supports the sector's strength.
Clarion Partners expects well-located, high-quality rental housing to continue delivering strong long-term performance due to these factors.
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