CBRE’s Core Multifamily Buyer Sentiment for Q4 2025 survey reports a modest but clear improvement in sentiment among core multifamily buyers, while negative sentiment levels held steady compared with the prior quarter. In contrast, value-add investors saw a decline in positive sentiment over the same period, pointing to a divergence between risk profiles within the multifamily investment universe. Underwriting assumptions were reported as largely unchanged for the second consecutive quarter, suggesting that investors are adjusting expectations more through sentiment and strategy than through immediate shifts in underwriting standards.
According to CBRE analysts, the stronger tone among core buyers helped support a 9% year-over-year increase in multifamily investment volume last year. The firm expects a similar percentage gain in transaction volume during 2026, indicating that investor engagement in the sector is not only stabilizing but gradually building. At the same time, bid-ask spreads are narrowing, which typically reflects greater alignment between buyer and seller pricing expectations. Even so, some investors remain reluctant to bring properties to market, signaling that pricing and timing considerations are still restraining potential supply.
CBRE’s commentary notes that more selling activity is anticipated over the rest of 2026 as buyers respond to a debt market that is described as more liquid and offering attractive financing options. This improvement in debt availability is a key backdrop for both the recent pickup in volume and expectations for continued trading. While not all owners are ready to sell, those who do enter the market may find a deeper pool of capital and more competitive terms than in earlier periods of dislocation.
On the pricing side, the survey found that average going-in cap rates for core multifamily assets increased by 2 basis points in the quarter to 4.75%, while average exit cap rates for core assets held steady at 4.95%. Core unlevered internal rate of return (IRR) targets remained unchanged at 7.7% for the third straight quarter, indicating that investors are not materially revising their return expectations for core strategies despite slight cap rate movement.
For value-add multifamily properties, the survey showed a 3-basis-point quarter-over-quarter increase in average going-in cap rates, ending the period at 5.26%, with exit cap rates unchanged at 5.38%. Unlevered IRR targets for value-add strategies continued to drift lower, declining for the eighth consecutive quarter to 9.36%. This combination of higher entry cap rates and gradually easing return targets suggests that value-add investors are recalibrating to current market risk and pricing conditions even as their overall sentiment has softened.
