Hello,
The year 2024 presented a mixed landscape for the multifamily market. Market fundamentals were muted by record-high supply levels, while property values faced downward pressure due to elevated interest rates. Despite these challenges, multifamily investments once again demonstrated their resilience and enduring appeal. Total sales volume in the sector represented the largest share within the commercial real estate space at 35%, reaffirming its position as a favored asset class over the long term.
While supply remains a key factor impacting the multifamily market as we head into 2025, it is a short-term challenge. Many Sun Belt markets are already showing signs of returning to pre-pandemic supply levels, paving the way for a healthier balance between supply and demand. This shift presents exciting opportunities for strategic investments in select markets.
Adding to this optimism is the resilience of the broader U.S. economy. Strong job growth, solid consumer sentiment, and a stable labor market have bolstered economic conditions, providing confidence to investors and developers alike. Multifamily remains well-positioned to potentially benefit from these trends, as the demand for housing continues to grow alongside population migration to high-growth regions.
That said, we remain prudent and continue to monitor the evolving economic landscape. The potential effects of a new administration, global disruptions, and natural disasters remind us to stay agile and informed in navigating the complexities of today’s market. As we enter 2025, we are committed to leveraging our expertise to identify potential opportunities that align with our strategy and deliver long-term value.
All my best,
Gerardo Gutierrez
CEO DDelta REI
“With continued solid fundamentals, multifamily is the most preferred asset class for commercial real estate investors in 2025. For all the short-term negative effects brought on by rising interest rates and record levels of new supply, strong renter demand will drive improving occupancy and accelerating rent growth. This, in turn, will lead to increased multifamily investment activity. The average multifamily vacancy rate is expected to end 2025 at 4.9%, and average annual rent growth at 2.6%.” — CBRE
Quarterly Highlights
- Our Fund VI projects have reached a significant milestone this quarter, with Lookout and Junewood welcoming their first residents as unit turnovers and move-ins are officially underway!
- We had the pleasure of attending the NYC GCM Consortium in October and the Toigo LA Gala in November. Both events were a tremendous success, providing valuable opportunities to connect with industry leaders, forge new partnerships, and strengthen existing relationships. It was fantastic to meet so many inspiring attendees—thank you to everyone who stopped by to engage with us!
Insights – Why We Continue to Bet on Texas:
We believe that the Texas multifamily market remains a great opportunity for long-term investment, driven by robust demand and a moderating supply pipeline.
Major Texas markets experienced an average reduction of 25% in multifamily permits in 2024, following significant declines averaging 29% in 2023. Notably, Houston and DFW have only 1.8% and 3.4% of existing inventory under construction, respectively—signaling tightening supply conditions.
DFW, Austin, and Houston emerged as national leaders in multifamily absorption in 2024. DFW topped the charts as the #1 market in the U.S., with over 30,000 units absorbed. Austin secured the #3 spot with more than 20,000 units absorbed, while Houston ranked #6, absorbing nearly 20,000 units. This exceptional performance highlights the strength of demand in these Texas markets, setting them apart from their peers nationwide.
The state of Texas ranked #1 in the U.S. for total multifamily absorption, further solidifying its position as a leading destination for multifamily investment.
Demand in these Texas markets continues to be fueled by relative affordability, strong job and economic growth, and attractive demographics. These high-growth markets—where demand is expected to surpass supply due to low construction activity as a percentage of inventory—are well-positioned for further strengthening.
We remain committed to expanding our presence in high-growth Texas markets with strong fundamentals, such as Houston and DFW, while maintaining a positive outlook for our existing assets in markets like Austin, as we continue to leverage Texas’s exceptional growth potential.
Source: CoStar
Not an offer: This document does not constitute advice or a recommendation or offer to sell or a solicitation to deal in any security or financial product. It is provided for information purposes only and on the understanding that the recipient has sufficient knowledge and experience to be able to understand and make their own evaluation of the proposals and services described herein, any risks associated therewith and any related legal, tax, accounting, or other material considerations. To the extent that the reader has any questions regarding the applicability of any specific issue discussed above to their specific portfolio or situation, prospective investors are encouraged to contact Gerardo Gutierrez – CEO – or consult with the professional advisor of their choosing.
Past Performance: There is no guarantee that the investment objectives will be achieved. Moreover, the past performance is not a guarantee or indicator of future results. Forward-looking statements: Certain information contained herein constitutes “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue,” or “believe,” or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events, results, or actual performance may differ materially from those reflected or contemplated in such forward-looking statements. Nothing contained herein may be relied upon as a guarantee, promise, assurance, or a representation as to the future.
Currentness: Except where otherwise indicated, the information contained in this presentation is based on matters as they exist as of the date of preparation of such material and not as of the date of distribution or any future date. Recipients should not rely on this material in making any future investment decision.
Confidentiality: This presentation is confidential, is intended only for the person to whom it has been directly provided and under no circumstances may a copy be shown, copied, transmitted, or otherwise be given to any person other than the authorized recipient without the prior written consent of Gerardo Gutierrez – CEO.
An investment in the Fund involves risks, including loss of the entire investment. For further risk considerations, see more here.
