3rd Quarter Report
October 22, 2025 – Bloomfield Hills, MI
IPO is pleased to announce our 2025 multifamily investment sales for the 3rd Quarter. Statistics and the current market outlook are also included below.
The 3rd quarter was a bit slower as markets adjusted to new monetary and fiscal policy after major changes were implemented. Once again, doomsday predictions have not panned out. We see growing transactions and expect 2025 to finish strong, propelling us into a big 2026. Major market forces are coalescing towards a rebound from the 2-year hangover caused by the spike in interest rates.
- Q3 closed with 9 multifamily sales reflecting over $25M in transactional volume. This was a
“one-off” decline in our volume, as markets adjusted to big changes. - IPO’s growing market share in the core Midwest multifamily markets solidifies us as the premier regional brokerage.
- Varied Asset Profile: Market-Rate, Affordable, Student & Senior
- Markets we closed in: Detroit, Columbus, Indianapolis, Lansing, Monroe, Clarkston, and Alpena.
The panic over tariffs has subsided and markets have adjusted. We saw Jerome Powell blink for the first time in a long time, and it appears there will be more rate cuts this year. This is resulting in bullish market sentiment towards selling or refinancing over the next 12 months, especially for assets with maturing loans in the next 18 months. Given the record-setting number of transactions in 2021 and 2022 – many on 5-year deals – it would suggest that 2026 could be a “bumper crop” of production, as the landscape is appealing enough for both sellers and buyers to engage in transactions that are economically beneficial for both parties.
Transactions involving broken capital stacks continue to sell, issues are being resolved, and portfolios are being appropriately adjusted. These are all healthy outcomes following the extreme market fluctuations of the past five years – volatility driven by a global pandemic, an era of ultra-low interest rates, and the significant $3 trillion expansion of the money supply. Together, these forces dramatically reshaped supply and demand dynamics across nearly every sector of the economy. After several challenging years, the outlook for multifamily investments looks increasingly promising.
As 2025 has unfolded the Midwest has proven to be the clear winner, outperforming the rest of the country in rental rate growth. 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. In contrast, the Midwest does not have the same supply imbalance. Markets like Detroit, Columbus, Chicago, Milwaukee, and Indianapolis are all in the top 10 nationally for rent growth in 2025, with average increases around 2.5% and peaks reaching 4%.
Another interesting development – particularly relevant to this newsletter – is the recent increase of developers nationwide acquiring older buildings (1960s-1970s vintage and older) for rehabilitation, rather than pursuing ground-up construction. IPO has recently brokered transactions of this kind and has seen an increase in the use of affordable housing programs to acquire existing apartments for rehab. This shift is largely driven by the sharp increase in construction costs and higher interest rates. We believe this trend will continue as the industry grapples with solving the shortage of affordable housing. The major expansion of the LIHTC program that was included in the “One Big Beautiful Tax Bill” is a benefit to all market participants – developers and prospective sellers alike.
Here at IPO, 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. Our team is seasoned and loyal and we do things differently than our competitors – the way we would want them done as an owner or investor. As you plan for 2026, contact us and let us know how we can help you with any important investment decisions.