EPISODE · Dec 25, 2025 · 3 MIN
Episode 4: Asset Class Deep Dive — Class B Multifamily Leads for 2026
from Hot Not CRE · host Hot Not CRE
Welcome back to What's Hot & What's Not in CRE — your daily pulse on commercial real estate in America.Today we're diving into multifamily asset classes — Class A, B, or C: which looks hottest for 2026?🔥 What's Hot — Class B Wins:Higher Cap Rates — 25-50 bps above Class A; value-add deals near 7%Affordability Crisis Driving Demand — Middle-income renters (teachers, nurses, essential workers) staying in workforce housingRecession Resilient — Outperforms in 73% of past recessions; renters trade down from Class A to BTightest Vacancy — 3.1% in 2022, 6.1% decade average (500 bps tighter than Class A historically)Value-Add Upside — Energy efficiency, security tech, cosmetic upgrades drive 15-25% utility savings and rent premiumsClass A Luxury Struggling — Vacancy above 10%; 2-3 months free rent concessions commonClass C Limited Upside — Can reposition to "B+" but rent growth ceiling existsSun Belt Oversupply — Austin, Phoenix, Dallas new Class A competing hard; Class B more insulated❄️ What's Not:Takeaway: Class B multifamily is where smart money is focusing for 2026.Thanks for tuning in. See you tomorrow!
What this episode covers
Welcome back to What's Hot & What's Not in CRE — your daily pulse on commercial real estate in America.Today we're diving into multifamily asset classes — Class A, B, or C: which looks hottest for 2026?🔥 What's Hot — Class B Wins:Higher Cap Rates — 25-50 bps above Class A; value-add deals near 7%Affordability Crisis Driving Demand — Middle-income renters (teachers, nurses, essential workers) staying in workforce housingRecession Resilient — Outperforms in 73% of past recessions; renters trade down from Class A to BTightest Vacancy — 3.1% in 2022, 6.1% decade average (500 bps tighter than Class A historically)Value-Add Upside — Energy efficiency, security tech, cosmetic upgrades drive 15-25% utility savings and rent premiumsClass A Luxury Struggling — Vacancy above 10%; 2-3 months free rent concessions commonClass C Limited Upside — Can reposition to "B+" but rent growth ceiling existsSun Belt Oversupply — Austin, Phoenix, Dallas new Class A competing hard; Class B more insulated❄️ What's Not:Takeaway: Class B multifamily is where smart money is focusing for 2026.Thanks for tuning in. See you tomorrow!
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Episode 4: Asset Class Deep Dive — Class B Multifamily Leads for 2026
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