Multifamily, single-family rental, and build-to-rent property types find themselves in an uncomfortably ironic crossroads today.
On one hand, the growth of shelter costs — housing and rental asking prices —helped grow property valuations and rents since the onset of the pandemic at an unusually high pace, increasing NOIs and pushing down cap rates.
On the other hand, that shelter costs growth has been a major driver of the very inflation that ultimately caused the Federal Reserve to increase interest rates as a way to cool the economy. A byproduct has been higher CRE financing rates that have made refinancing for many next to impossible.
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