Investors looking for income generation, appreciation, diversification and other benefits often turn to commercial real estate. Physical properties tend to perform independent of the stock market and provide a hedge against inflation. Additionally, property owners can enjoy certain tax benefits, such as deducting interest expense on a commercial property loan and offsetting gains with depreciation. For many individuals, multifamily properties arguably present the most accessible, relatable and rewarding real estate investment available. Everyone needs a home, after all, and owners generally have the ability to increase rental rates yearly as leases renew or residents turn over.The pandemic raised the profile of multifamily properties: Not only were they essential, but they also displayed resiliency. During the height of the pandemic, for example, apartment landlords continued to collect around 93 to 96 percent of rent payments each month, according to the National Multifamily Housing Council’s rent payment tracker. Many investors in retail, office and hotel properties, which continued to lag in 2021 because of the COVID-19 pandemic, have turned to multifamily assets. It is expected that 2022 will be another strong year for the asset class.

Fundamentals Drive Multifamily Investment

The growing interest in multifamily assets has ignited a surge in investment. Apartment sales were projected to reach $213 billion in 2021, which would be 10 percent more than sales recorded in 2019 prior to the pandemic, according to CBRE. The brokerage company anticipates apartment investment sales to climb another 10 percent to $234 billion in 2022.