2nd Quarter Report
July 18, 2025 – Bloomfield Hills, MI
IPO is pleased to announce our 2025 multifamily investment sales for the Second Quarter. Further statistics and the current market outlook are also shared below.
Year-to-date transaction volume has remained steady, with activity showing signs of uneven but continued acceleration. Market participants have largely moved past the expectation of needing policy relief from the Federal Reserve to facilitate deals. Looking ahead, transaction volume is expected to rise through year-end, driven by upcoming loan maturities and capital calls. These factors are prompting sales from motivated – though not distressed – sellers seeking to return capital to investors, often presenting attractive opportunities for basis plays.
- Q2 closed with 20 multifamily sales reflecting over $51M in transactional volume. This is up by 5 transactions from 1Q of 2025
- IPO’s expansion into Florida continues to demonstrate our growth and success in challenging market conditions
- Varied asset profile: market-rate, affordable, student and senior
- Markets we closed in: Detroit, Lansing, Downriver, West Michigan; Indianapolis, IN; Cuyahoga, OH
Evolving trade agreements and tariff policies are creating uncertainty and, in theory, complicate the ability to lower rates. Only time will tell where policy lands and how various sectors of our will be impacted. Until that is stabilized, there are considerable opportunities in the marketplace for investors who are well-capitalized and experienced enough to see the basis plays and strong underlying fundamentals.
Deals with broken capital stacks have been slowly trading, and active buyers are getting attractive investments despite higher rates and lower LTVs. We have even seen a few trades locally where decades-long builders have elected to buy existing assets because the basis is too attractive to turn down, and value can be built in to satisfy the builder itch. Given the high costs of construction and other barriers to enter, we foresee this business model expanding.
The Midwest is outperforming the rest of the country in terms of rental rate growth. Markets like Detroit, Columbus, Chicago, Milwaukee, and Indianapolis are all in the top 10 nationally for rental growth in 2025, averaging around 2.5% and as high as 4%. The typical market leaders in Sun Belt states and coastal markets have seen rents decrease due to supply-side pressure and continued deliveries with prolonged saturation; the Midwest does not have the same supply imbalance.
This current disparity between various other markets underscores the case for Midwest multifamily properties. Our markets perform very well over the long haul with much more attractive risk-adjusted returns to account for the absence of supply-side pressure. Our firm belief is this is the most attractive buying market since the Great Recession, and perhaps even better, because there is ample debt and equity available for deals compared to the last time we saw a buyers’ market.
At IPO, we strive to be the best brokerage in the apartment industry and show this in everything we do. We are made up of nimble and creative problem-solvers who navigate deals in challenging landscapes. Our goal is to build partnerships that stand the test of time, deliver significant value for our clients, and in the process, create generational wealth. We would like to thank our clients for entrusting us with your multifamily investment brokerage needs. As you plan for 2025 and 2026, contact us and let us know how we can help you with any important investment decisions.