Maximizing Operational Efficiency in a Volatile Multifamily Market

As summer descends upon us, activity in the multifamily investment scene in Boston remains tempered. Rising interest rates continue to dampen the mood, slowing down transactions compared to 2022’s peak. Even the multifamily development pipeline has stalled as developers struggle to make projects pencil.

However, existing multifamily owners might be entering a golden age. Rent growth has soared to record highs, averaging $2,820 per unit ($3.20/SF), exceeding pre-pandemic levels. Vacancy rates have also returned to normal after pandemic lows. Boston’s strong job market, fueled by booming tech and life sciences, keeps demand high, while rising interest rates, construction costs, and permitting hurdles limit new supply.

Savvy owners are capitalizing on this by maximizing operational efficiency. Strategic rent adjustments ensure they capture market value without alienating tenants. Offering in-demand amenities like granite or quartz countertops and in-unit laundry justifies premium rents, while unique perks like dog grooming services set properties apart.

Beyond these tweaks, owners can further enhance returns through long-term strategies. Optimizing occupancy with proactive tenant retention and strategic lease renewals keeps income flowing. Investing in additional bedrooms or developing unused space can generate higher returns down the line.

At the same time, we have an affordability crisis and the long term economic health of the Boston regions hinges upon increasing the supply of housing. While the market adjusts, existing Boston multifamily owners have a unique opportunity. By implementing a combination of operational efficiencies and long-term value-enhancing strategies, they can navigate the changing landscape and potentially secure a unique window of profitability before 2024 completions and a potential slowdown in job growth has a softening effect.

Our Services

Colliers has one of the largest and most experienced teams of multifamily advisors in the industry, strategically located in key markets around the globe. Our combination of market dominance, expertise and singular focus make us uniquely successful in helping our clients achieve their acquisition and/or disposition objectives. Whether selling a single asset or a national portfolio, our clients rely on combined resources to obtain the best market information and achieve the highest price. If expanding your portfolio is the objective, our local market relationships can help you identify and acquire properties that meet or exceed your investment goals.

"It is not the strongest of the species that survives, not the most intelligent that survives. It is the one that is the most adaptable to change." - Charles Darwin

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