Multifamily fared better than expected during the pandemic, but despite optimism across the sector amid mounting positive signs, the asset class has a "plethora" of issues ahead of it in 2021. 

Fundamentals have been weakened although not nearly as badly as had been expected. Some 252,000 apartment units, or 1.7% of total stock, were absorbed in 2020, according to Yardi Matrix—only 12.0% less than the 286,300 units absorbed the prior year, and not too far off the average during the last cycle. CBRE research also shows the overall vacancy rate increased 10 basis points to 4.5% in the fourth quarter, marking a 50 basis point increase year-over-year. 

Perhaps more worrisome, many owners will have to contend with payment shortfalls as the nearly $70 billion in overdue rent comes due, Yardi analysts caution. Some tenants will make up those payments over time, while other owners may reap the benefits of the $25 billion federal renter subsidy passed by Congress as part of the Biden Administration's most recent round of stimulus. And in some cities and states, eviction bans make it even more difficult to collect rents.