Apartment properties have significantly outperformed other property types, especially over the past decade. Combined with stable cash flow, this asset class offers superior risk-adjusted returns with lower volatility.
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There is consistent demand. Regardless of macroeconomic conditions, people always need a place to live.
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Barriers to home ownership, demographic trends, and behavior trends continue to support healthy demand.
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Multifamily housing is the only real estate class that benefits from financing designed specifically for apartments. Fannie Mae and Freddie Mac provide preferential financing sources.
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Short-term lease structures provide an advantage with respect to inflation. Apartment leases provide owners with the ability to make upward adjustments to cover increased operating costs.
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While multifamily communities require ongoing improvements, the capital expenditure needed to maintain them is typically lower than for other commercial properties.
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Apartment unit turnover requires only minimal investment in contrast to significant improvements typically needed to attract and retain office, industrial, or retail tenants.
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Unlike large office, retail, and industrial tenants, renters do not have significant negotiating leverage.
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Depreciation of 27.5 years is more tax advantageous than other property types (39.5 years).
