Market & Trends
Midwest Multifamily Market Outperforms Nation NEAR-PERFECT BENCHMARKS SIGNAL: IF YOU AREN’T CONSIDERING MIDWEST INVESTMENTS, YOU’RE MISSING OUT.
JEFF ROTH
W hy the Midwest?
Given these strong fundamentals, it may be time to consider diversifying your portfolio into the region. WHAT’S EXPECTED FOR 2025? To take the current pulse of the Midwest market,
combined, beating out the “Who’s Who” of national franchised brokerages. GREG, WHY THE MIDWEST? The Midwest is one of the best places to invest money in multifamily. Rent growth is steady and jobs are plentiful. The Midwest typically has good cash flow, unlike coastal states throughout the U.S. WHAT MARKETS DOES IPO SERVE? IPO brokers multifamily assets in Michigan, Ohio, Indiana, Illinois, and Kentucky. We should be licensed in Florida in the next couple of months. WHAT TRENDS DID YOU NOTICE IN 2024? Multifamily sales were way down in the first half of last year and then rebounded in the third and fourth quarters due to interest rates. WHAT ARE YOU FORECASTING FOR 2025? As long as bank debt stays sub 7% and Fannie Mae and Freddie Mac debt stays
According to a September 2024 article in Yield
PRO Magazine written by Cushman Wakefield, the Midwest has a lot going for it. For starters, it boasted the second lowest unemployment rate, trailing only the Sun Belt. Midwest markets also led the nation in rent growth yet was still seen as affordable compared to the rest of the nation (see accompanying figure). It also had the highest concentration of 20-34-year-olds between 2010 and 2023. Additionally, the Midwest enjoyed the highest multifamily occupancy rate, has a diverse economy, had the second-fastest recovery from the pandemic, witnessed the lowest new supply of multifamily coming to the market, and had the highest cap rates.
I interviewed Greg Coulter, the founder and managing
member of Income Property Organization (IPO), a privately held multifamily brokerage headquartered
in Bloomfield Hills, Michigan. Costar reports that IPO is a top
multifamily broker in the Midwest. In Detroit alone, it was the broker of the largest sale in the Detroit market in 2024, and its sales volume in Detroit was almost as much as the other top 10 brokerages
38 | think realty magazine :: march - april 2025
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