Top Trends Across Cushman & Wakefield’s Multifamily Portfolio

This year is off to a strong start, despite economic headwinds, and we continue to help our clients navigate a volatile market.

Strong rental demand is driving higher occupancies across our portfolio, even amid competition from new supply. Retention rates also remain high, boosting property-level NOI. While economic uncertainty continues to weigh on the outlook, we are on solid footing and well-positioned to handle whatever the market brings.

The Cushman & Wakefield Asset Services team provides third-party management services for over 167,000 units nationally, making our team one of the largest in the country. This operation generates a trove of data and analytics, which we share regularly through articles like this and our multifamily newsletter, Multifamily Digest. Because this data is proprietary to our clients, we do not share aggregate levels among most metrics, but broader trends are instructive with respect to market performance.

Demand Remains Robust Across the Portfolio:

 

 

Compared to a year ago, our data shows about twice as many prospective residents contacting, visiting and applying to our properties. These robust growth figures underscore sustained strong demand as we approach the spring and summer leasing seasons.

Strong Demand Powering Occupancy Improvement

Despite the broader apartment market delivering more than 500,000 units in the past 12 months, our portfolio posted steady improvement in occupancies. While occupancies leveled off during the winter thanks to prototypical seasonality, demand picked up as the new year began. Over the past 90 days, occupancy increased by more than 40 basis points (bps), outperforming the national occupancy rate, which rose just 10 bps.

 

Class A properties, facing the most supply pressures, drove the recovery with occupancies rising nearly 170 bps over the past year, compared to a 110 bps increase across our entire portfolio.

Strong Demand Is Driving a Rebound in Lease Trade-Outs 

After experiencing typical seasonal fluctuations at the end of last year, lease trade-outs have recovered, as new lease trade outs are back in positive territory. Overall, lease trade-outs are just slightly below pre-pandemic levels. While renewals have remained a key strength during the past few years of market volatility, the recovery in new lease trade-outs, now well above where they were a year ago, is noteworthy. Naturally, some markets are growing faster than others, with broad outperformance in the Northeast and Midwest.

Retaining Residents Is in Our DNA

Our team proactively prioritized resident retention, aligning with our clients’ business plans, to address rising turnover costs and capitalize on the strength of lease trade outs. This strategy is yielding results, with our renewal rates exceeding the national benchmarks for each class. Notably, Class A renewals are outperforming by a significant margin.

With more than 167,000 units managed nationwide, the Cushman & Wakefield management team is constantly diving into the proprietary data gleaned from our boots-on-the-ground experience and expertise in operations. Looking at trends like these allows our clients to make smart decisions with their assets, monitor performance closely with a trusted management partner, as well as be predictive in their underwriting. We’re excited to see what the data shows us next quarter and look forward to sharing those insights.