Real Estate Has Repriced

What Forum sees from its lending and investing platforms, and what it means for client portfolios.

From the third quarter of 2022 through September 2026, the S&P 500 rose 93% while private real estate values fell 18%, according to the NCREIF Property Index.¹ Those index figures tell only part of the story.

Published indexes are appraisal-based and lag the market. Forum invests in and lends on apartments in 25 states, so we see deals and loans as they happen. Below is what that view shows today, and what we believe it could mean for investors over the cycle ahead.

01 | The Reset Isn't Finished

Many private owners haven't marked their properties to market because they haven't had to sell. Loans coming due are forcing the issue.

A buyer borrowing at around 6% today needs a property's yield to cover that cost. We're seeing newer assets that traded at 4% to 5% yields in 2021 now price closer to 6% or higher, with owners facing maturing debt among those accepting the reset.

What This Means for Investors:
We believe published indexes understate how far value shave reset, and that maturing debt could bring more assets to market at today's pricing,creating opportunities not yet fully reflected in market data.

02 | Supply Is Falling

Construction starts are 73% below their 2022 peak and at the lowest level since 2011. The2021-22 building boom delivered a record 694,000 apartments in 2024. CoStar forecastsabout 310,000 a year from 2027 to 2029, less than half that level.²

Our lending platform is busy, much of it with bridge loans to newly completed buildings that still need time to lease up. Far fewer new projects are coming in behind them. Units under construction have fallen 48%, from 1.11 million at the end of 2022 to about 573,000 in October.² Building costs are up 18% since Q3 2022, and the 10-year Treasury was 5.29%at the end of September.³ Costs haven't eased as builders expected, because data center and infrastructure construction are competing for the same materials and labor. A project that hasn't started today won't deliver for several years, making the supply pullback difficult to reverse quickly. We believe that dynamic can support rent growth over the next several years.

03 | Renters Are Staying Longer

"You can work from home, you can shop from home, but you have to have a home," says Darren Fisk, Forum's founder and CEO. Apartment demand has several drivers, including job and population growth, household formation and the cost of owning a home. Zillow estimates the U.S. is short about 4.7 million homes. Even the largest wave of new apartments in decades wasn't enough to close that gap.⁴

The path into homeownership has also shifted. In 1960, 52% of Americans were married and owned a home by age 30. Today it's 12%. The 30-year mortgage rate was 7.40% in mid-October, and owning a starter home costs about 52% more each month than renting in the largest metros.⁵ High rates and the cost of buying appears to keep people renting longer.

As new supply falls, those renters are filling units. CoStar estimates about 535,000apartments will be absorbed in 2026, the third-strongest year since 2000, outpacing deliveries by about 93,000 units.⁵

What This Means for Investors:
Renter demand has multiple supports. As long as rates and home prices keep ownership out of reach, we believe that demand is likely to persist.

04 | Full Buildings, Healthy Renters

National apartment occupancy was 95.6% in Q3 2026, per RealPage. Wage growth has outpaced apartment rent growth for 42 straight months, according to the Atlanta Fed and RealPage. In August, wages grew 4.1% and rents 1.8%.⁶

A property's income tends to rise before its asking rents do. During the supply wave, new buildings offered months of free rent, often referred to as concessions, to fill units. As occupancy increases, those concessions burn off and more of each lease turns into collected rent. As an example, at one Atlanta property we acquired in January, free rent fell from three months to one while occupancy rose from 86% to 95%, all without an increase in asking rents.⁷

What This Means for Investors:
We believe full buildings and falling supply point to growth in both income and rents. With occupancy near 96%, owners are positioned to regain pricing power. And with rent growth trailing wage growth for 42 straight months, we believe there is room for rents to catch up as supply tightens.

05 | Buying Below the Cost to Build

Since Q3 2022, apartment net operating income (NOI) is up 9% and apartment values are down 14%, per the NCREIF apartment subindex. That's an unusual combination. For a public company, it would be like earnings rising 9% while the stock fell 14%: the multiple compressed, not the business. Over the same period, the cost to build rose 18%. GreenStreet forecasts multifamily NOI growth of 4.4% a year from 2028 to 2030, up from 0.1% in 2025 and the highest among the major property sectors. Office is forecast at 0.4%.⁸

We believe apartments completed in 2024 and 2025 can be acquired today for less than they cost to build. Older properties acquired for renovation and re-leasing, a strategy often referred to as "value-add," have drawn fewer buyers as expected rent premiums haven't held up against new supply. Before we buy, we also test for roughly two times debt service coverage at today's fixed rates.

Other buyers appear to see the same gap. Commercial real estate investment volume rose 21% in the first half of 2026 to $250.3 billion, per CBRE, and 74% of investors in CBRE's January survey planned to buy more this year, with multifamily their top target.⁹

What This Means for Investors:
Buying below replacement cost may offer a margin of safety. New competing supply is hard to justify until rents rise enough to cover today's construction costs.

The Bottom Line

The indicators have shifted. New supply is falling, buying a home costs about 52% more than renting, and occupancy is near 96%. We believe values haven't caught up to those fundamentals, and rising investment volume suggests other buyers see the same gap.

The indicators at a glance · figures from sections 2-5; outlook reflects Forum's views and is not guaranteed.

For advisors weighing real estate for clients, we believe current conditions merit that conversation.

Since 2007, Forum has invested in and lent on apartments, giving us a perspective on today's multifamily market from both sides of the capital structure. To learn more or discuss how these views apply to your clients, contact us at [email protected].

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Important Disclosures

This material is for informational purposes only and is not an offer to sell or a solicitation to buy any security, nor a recommendation for any particular investor. Views are Forum's as of October 2026, are not tailored to any investor's circumstances, and may change without notice. Certain information is from third-party sources believed to be reliable but has not been independently verified. Forecasts, including those of third parties, and other forward-looking statements are not guaranteed, and actual results may differ materially. Index figures are unmanaged, do not reflect fees or expenses, and cannot be invested in directly. NCREIF figures are unlevered, gross of fees and appraisal-based, and may understate volatility. Returns of a fund investing in real estate would differ because of leverage, fees and other factors. Forum and its affiliated funds invest in and lend on multifamily real estate and may benefit from increased investment in the sector. Past performance does not guarantee future results. Real estate investments involve risk, including illiquidity and possible loss of principal.

Sources: 1. Private real estate: NCREIF Property Index (unlevered, appraisal-based). Stocks: S&P 500. Q3 2022-Q3 2026. 2. Construction starts: CoStar Group and Apartments.com, via Commercial Observer, May 12, 2026. Deliveries and 2027-29 forecast: CoStar, as of October 13,2026. Forecasts are not guaranteed. 3. Building costs: Turner Building Cost Index, Q3 2022-Q2 2026. 10-yearTreasury: U.S. Department of the Treasury, Daily Treasury Par Yield Curve Rates, September 30, 2026. 4. Source: Zillow, July 15, 2026, based on 2024 U.S. Census Bureau American Community Survey data. 5. Absorption: CoStar, as of October 13, 2026. Mortgage rate: Freddie MacPrimary Mortgage Market Survey. Rent vs. own: Realtor.com Rental Report, August 2026. Married and own a home by age 30: Realtor.com analysis of U.S. Census Bureaurecords, April 29, 2026. 6. Occupancy: RealPage, Q3 2026. Wage growth: Federal Reserve Bank of Atlanta Wage Growth Tracker. Rent growth: RealPage effective asking rents. Through August 2026. 7. Illustrative only. This property example is not representative of all Forum investments and does not reflect the performance of any Forum fund. 8. NOI and values: NCREIF NPI Apartment subindex, Q3 2022-Q2 2026. Building costs: Turner Building Cost Index. NOI forecasts: Green Street, September 2026. Forecasts are not guaranteed. 9. Source: CBRE, Q2 2026 U.S. Capital Markets Report; 2026 North American Investor Intentions Survey; U.S. Real Estate Market Outlook Midyear Review 2026.