Viewpoint IRR 2025 Outlook
Summary of Overall Message for All Asset Classes The commercial real estate market in 2025 is on a path to greater stability and long-term growth. Despite past challenges, the outlook remains positive as market fundamentals strengthen across asset classes. Investors are shifting their focus to sustainable growth, strategic opportunities, and value-driven investments. With inflation moderating and interest rates finding equilibrium, the real estate sector is well-positioned for a period of steady progress and resilience. Main Points for Multifamily Focus 1. Continued Stability and Growth: Multifamily housing is moving into a balanced phase, with rent growth steadily climbing and vacancy rates gradually adjusting to healthy levels. 2. Sustained Demand: Demand remains strong nationwide, driven by steady job growth, urban migration, and evolving lifestyle preferences. 3. Expansion in Emerging Markets: While Sunbelt states remain a focal point, regions like the Midwest are experiencing newfound momentum due to affordability and quality of life. 4. Affordability Trends: With rent-to-income ratios improving, multifamily housing continues to present attractive options for tenants and strong returns for investors. 5. Investor Confidence: Capital is flowing into well-positioned markets, with a clear preference for stable, long-term investments. 6. Positive Outlook: As construction pipelines adjust and demand stays resilient, multifamily real estate is poised for a period of healthy and sustainable growth. Midwest and Kansas City Multifamily Market 1. Midwest on the Rise: The Midwest, particularly Kansas City, is experiencing a wave of positive momentum, with strong demand for housing fueled by population growth, a thriving job market, and an attractive cost of living. 2. Declining Vacancy Rates: With steady demand and a more measured pace of new developments, vacancy rates are expected to decline, creating a favorable environment for property owners and investors. 3. Affordable and Desirable: Kansas City and other Midwest cities offer an unbeatable combination of affordability, high quality of life, and economic opportunity—making them increasingly attractive to renters and businesses alike. 4. Economic Resilience: With diverse industries, solid employment figures, and ongoing infrastructure investments, Kansas City is proving to be a resilient and growing hub for multifamily investment. 5. Attractive Investment Environment: Compared to coastal markets, Kansas City presents excellent value with competitive pricing, strong rental demand, and promising returns for forward-thinking investors. 6. Positioned for Long-Term Growth: As companies and individuals continue to seek affordability and lifestyle benefits, Kansas City is set to shine as a top-tier market with ample opportunities for growth and innovation. 7. Vibrant Community Development: New developments in Kansas City focus on creating dynamic, thriving communities that attract both residents and businesses, ensuring a bright future for the multifamily sector.