IEQ Elevate: Multifamily Real Estate Outlook with Four Peaks

At IEQ Capital, continuous learning is central to how we help families navigate evolving markets with clarity and foresight. Through IEQ Elevate, our professional development platform, we bring leading investment and real estate perspectives to our team, translating insights into strategies for UHNW families and family offices.

Recently, we hosted a discussion with Four Peaks Multifamily Partners (FPM Partners), a real estate investment manager focused on multifamily properties in select U.S. growth markets with an emphasis on Mountain West and Midwest states.

From Challenge to Inflection

The conversation began with a review of the multifamily real estate sector's performance through 2023 and 2024. These years were broadly difficult for owners and investors. While most well-maintained properties remained at healthy occupancy levels, elevated new supply weighed on rents, which in many cases failed to meet underwritten expectations. In addition, concessions and price adjustments were sometimes necessary to maintain tenant demand. That said, multifamily has proven to be more resilient than other commercial real estate sectors such as office, where even steep discounts have often failed to revive demand. ¹

Looking ahead, however, FPM Partners views 2025 as an inflection point for improving fundamentals. While some recent Census Bureau data has shown conflicting signals, most indicators suggest that new construction starts are moderating, which should reduce the risk of future oversupply.² With peak deliveries likely in the rearview, we believe reduced levels of new supply have supported renewed rental growth in recent periods, particularly for value-add managers. This transition is creating conditions where operational expertise, disciplined underwriting, and access to capital become central to value creation.

Opportunities from Distress and Legacy Sales

As the discussion turned to where opportunities may emerge, FPM Partners described today's opportunity set as a "three-legged stool." Two of the legs are rooted in some form of distress: owners facing higher debt service costs and maturing loans who are compelled to sell, and developers who underwrote projects during the low-rate era but now contend with refinancing challenges and slower than anticipated lease-ups, often forcing early exits as construction loan maturities loom. The third leg reflects a different dynamic, long-time "mom and pop" landlords seeking to sell properties as part of estate or liquidity planning. ^{1 5}

IEQ believes each of these forces is contributing to a pipeline of potentially attractive assets coming to market. For UHNW families, this dynamic underscores why alignment with managers who can identify multifamily real estate investment opportunities in complex situations may prove especially valuable.

Regional Divergence in Rent Growth

Geography and operations add another layer of differentiation across multifamily markets. In the Midwest, markets such as Columbus and Indianapolis continue to exhibit positive rent growth, aided by improved affordability relative to coastal markets and solid employment growth. ^{1 3 5} By contrast, the Sun Belt has attracted significant long-term migration and investment but faces near-term challenges as elevated new supply continues to be absorbed across several major markets. ^{1 4}

Operating costs also remain in focus. After sharp increases in 2022-2023, insurance costs began to normalize in 2024, though regional disparities persist. These operational realities, financing, insurance, and regional supply dynamics, are shaping the playing field just as much as headline valuations. ^{1 5}

Policy Watch

Beyond market fundamentals, tax policy also bears watching. A significant change came with the One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, which permanently restored 100% bonus depreciation for qualifying property acquired and placed in service after January 19, 2025. This reverses the previous phase-down schedule under the 2017 Tax Cuts and Jobs Act, which had reduced the benefit to 40% for 2025. ^{6 7}

For multifamily investors, the ability to accelerate deductions upfront may enhance early tax efficiency on new acquisitions and renovations. Tax strategy remains a critical element of multifamily real estate investment planning for UHNW families. At the same time, we believe underwriting decisions should remain anchored in long-term cash flow and operating fundamentals, not solely in tax acceleration. We encourage UHNW families to discuss these developments with their tax and legal advisors to ensure alignment with broader planning objectives.

Why It Matters for UHNW Investors

Taken together, these factors point to a multifamily sector that is more selective and more nuanced than in recent years. The combination of distress-driven sales, regional rent divergence, evolving financing conditions, and renewed tax incentives creates both complexity and opportunity.

For UHNW families, the implication is clear: success will likely depend on partnering with managers who can source transactions directly from motivated sellers and navigate complex situations with discipline. In a segmented market where not every deal will perform equally, the ability to access opportunities off-market, rather than through broadly brokered processes, may prove to be a key source of advantage.

Closing Thoughts

At IEQ, we continue to monitor how supply cycles, financing markets, and tax policy will influence multifamily performance. For families seeking resilient income and potential value creation, aligning with experienced managers may offer exposure to both stability and recovery in this evolving real estate landscape.

We invite you to connect with our team to explore how multifamily opportunities may align with your family's long-term objectives.

About the Speakers

Four Peaks Multifamily Partners (FPM Partners) is a real estate investment manager founded in 2019, exclusively focused on multifamily properties in select U.S. growth markets. Since inception, FPM Partners has acquired more than $1 billion in multifamily communities, leveraging decades of institutional experience across 35,000 units in 30 states. The firm applies a disciplined, value-add strategy, targeting opportunities where cosmetic and operational improvements can enhance cash flow and long-term property values.

Sources

1. Four Peaks Multifamily Partners, Internal Market Update, August 26, 2025.

2. US Census Bureau Data, September 2, 2025.

3. Freddie Mac Multifamily Outlook, December 2024.

4. CBRE U.S. Multifamily Midyear Outlook, June 2025.

5. NMHC 2025 Risk Survey, March 2025.

6. One Big Beautiful Bill Act (OBBBA), signed into law July 4, 2025.

7. U.S. Internal Revenue Code, Section 168(k) (Tax Cuts and Jobs Act, 2017).

Credit - Distressed

-Credit Risk: Distressed companies are usually not rated or well below investment grade and may be already in default and at risk of bankruptcy.

-Execution Risk: Turning around a distressed company requires significant expertise and is an intensive process, creating elevated execution risk.

-Liquidity Risk: There is no guarantee that any fund's liquidity mechanisms will be reliable, and the managers are under no obligation to provide liquidity. Distressed credit is usually highly illiquid until it has been turned around.

-Macro Risk: The ability to source transactions is contingent on the level of stress in the overall market. Low levels of economic stress may delay deployment, while higher than expected levels of stress may cause existing positions to underperform.

Real Estate - Value-Add

-Competitive Risk: There are many market participants in the value-add space, and heightened competition may limit deal flow or the ability to source attractive deals.

-Execution Risk: Value-add can involve significant execution risk specific to renovation, lease-up, and/or development to drive returns.

-Interest Rate Risk: There is risk involved if rates were to increase, from both a financing and asset value perspective, and rents may not grow fast enough to offset inflation.

-Liquidity Risk: Exit strategies are typically contingent on capital markets and prevailing appetite for risk, which may ebb and flow with the cycle.

-Tenant Credit Risk: There is risk that the tenants of the underlying properties could fail on their rent payments, which would ultimately negatively impact cash flows, yield, and return.

IEQ Capital, LLC has a business relationship with Four Peaks Multifamily Partners.

This material is as of the date indicated, not complete, and subject to change. Additional information is available upon request. No representation is made with respect to the accuracy, completeness, or timeliness of information, and IEQ assumes no obligation to update or revise such information. The information set forth herein has been developed internally and/or obtained or derived from sources believed by IEQ Capital, LLC ("IEQ Capital") to be reliable. However, IEQ Capital does not make any representation or warranty, express or implied, as to the information's accuracy or completeness, nor does IEQ Capital recommend that the attached information serve as the basis of any investment decision. This document has been provided to you solely for information purposes and does not constitute an offer or solicitation of an offer, or any advice or recommendation, to purchase any securities or other financial instruments, and may not be construed as such. It is not intended to be, nor should it be construed or used as investment, tax, accounting, legal or financial advice. IEQ provides no assurance or guarantee that any investment will be successful or that any returns will be achieved. PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.