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

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.
Sustained Demand: Demand remains strong nationwide, driven by steady job growth, urban migration, and evolving lifestyle preferences.
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.
Affordability Trends: With rent-to-income ratios improving, multifamily housing continues to present attractive options for tenants and strong returns for investors.
Investor Confidence: Capital is flowing into well-positioned markets, with a clear preference for stable, long-term investments.
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

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.
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.
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.
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.
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.
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.
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.

Kansas City and the broader Midwest are stepping into an exciting phase of growth and opportunity. With strong economic fundamentals and an optimistic outlook, the region is well-positioned for long-term success in the multifamily sector.

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