Webinar Recap: Behind The Deals with Newmark: The State of Multifamily

Momentum Multifamily recently hosted Jack Forman of Newmark DFW and Carter Mizell of Newmark Houston for a conversation focused on one question multifamily investors continue to wrestle with: What is actually happening in the market right now?

The discussion brought a broker’s perspective to the state of multifamily across two of Texas’ largest markets, Dallas-Fort Worth and Houston, touching on transaction activity, pricing, capital markets, buyer and seller expectations, and where opportunities may be developing as 2026 progresses.

A Market That Is Moving Again

The multifamily market continues to work through the effects of the dramatic change in interest rates and capital markets that began earlier in the cycle.

For several years, the gap between what sellers wanted and what buyers could economically justify made transactions difficult to complete. Today, the market is gradually becoming more functional as owners, buyers, lenders, and equity providers adjust to the new environment.

That does not mean the market has returned to the conditions investors experienced before rates increased. Instead, deals are getting done under a different set of assumptions.

Buyers are underwriting more carefully, sellers are becoming increasingly realistic about pricing, and investors are putting greater emphasis on basis, existing operations, debt structure, and the ability to execute the business plan without relying heavily on aggressive future rent growth or cap-rate compression.

Pricing Is Becoming More Discoverable

One of the biggest challenges over the past several years has been price discovery.

When transaction volume falls, there are fewer comparable sales available to establish where assets should trade. At the same time, higher borrowing costs can create a significant difference between the price a seller believes an asset is worth and the price at which a buyer can achieve acceptable returns.

As more transactions occur, that gap becomes easier to define.

Rather than waiting for the market to return to previous valuations, buyers and sellers are increasingly evaluating deals based on the economics available today.

For investors, this makes basis increasingly important.

A property purchased at an attractive basis can provide flexibility that is difficult to manufacture through financial engineering alone. Investors who can acquire below replacement cost, below a previous owner’s basis, or at a valuation supported by current operations may be better positioned to withstand uncertainty while retaining upside when property fundamentals improve.

The Lending Environment Is Shaping the Market

Debt remains one of the most important components of multifamily transaction economics.

Changes in interest rates affect much more than monthly debt service. They influence proceeds, debt-service coverage, buyer returns, valuations, refinancing options, and ultimately the price investors can afford to pay for an asset.

As a result, financing has become an integral part of the acquisition strategy rather than something addressed after a property is selected.

Buyers today are evaluating a broader range of capital structures, including conventional agency financing, bank and bridge debt, assumable loans, preferred equity, and other structured-capital solutions.

Properties with attractive existing debt can therefore carry an additional competitive advantage.

A low-rate assumable loan, for example, can materially alter the economics of an acquisition compared with financing the same property entirely at current market rates.

Dallas-Fort Worth and Houston Remain Active, but Every Deal Is Different

Although DFW and Houston share many of the long-term fundamentals that continue to attract multifamily investment to Texas, each market has its own supply, demand, rent-growth, and transaction dynamics.

DFW continues to be one of the country’s largest and most closely followed multifamily markets. Population growth, corporate relocations, employment diversity, and long-term housing demand remain important parts of the investment thesis, while investors are also closely watching the impact of recent apartment deliveries and the time required for that new inventory to be absorbed.

Houston presents its own set of opportunities. Continued population growth and a broadening employment base support apartment demand, while the sheer size of the metro creates substantial differences between individual submarkets.

The important takeaway for investors is that “Texas multifamily” cannot be treated as a single market.

Performance can vary dramatically by submarket, vintage, asset quality, resident profile, existing supply, school district, nearby employment, and even the property’s immediate competitive set.

That makes local market knowledge increasingly important when evaluating acquisitions.

Buyers Have Capital, but They Are Selective

There continues to be significant interest in multifamily as an asset class.

The difference in the current market is that investors have become more selective about where and how they deploy capital.

A property simply being located in Texas or belonging to the multifamily asset class is not enough to create a compelling investment opportunity.

Buyers are increasingly looking for a specific reason a deal works.

That may include:

• An attractive acquisition basis
• Distressed or motivated ownership
• Favorable assumable debt
• Operational upside
• Below-market rents
• Renovation potential
• Strong submarket fundamentals
• A meaningful discount to replacement cost
• An opportunity to improve NOI through better operations

That selectivity can create opportunity for buyers willing to dig deeper into individual deals rather than relying on broad market appreciation.

Operations Matter More Than They Did in the Last Cycle

Another important shift in today’s market is the growing importance of operations.

When rent growth was exceptionally strong and cap rates were compressing, market appreciation could sometimes compensate for imperfect execution.

That environment has changed.

Today’s owners increasingly have to create value through the property itself.

Occupancy, renewals, bad debt, concessions, expenses, insurance, taxes, payroll, utilities, ancillary income, and resident retention can all materially affect NOI and therefore asset value.

Small operational improvements can have an outsized impact when translated through a multifamily property’s capitalization rate.

For owners and buyers alike, the ability to operate effectively has become a major component of the investment thesis.

The Opportunity May Be in the Transition

Periods of market transition are rarely comfortable, but they can create opportunities that are unavailable during highly competitive markets.

Owners facing loan maturities, refinancing challenges, partnership issues, capital needs, or changing investment objectives may decide that selling is the appropriate path forward.

At the same time, investors with patient capital and the ability to execute may be able to acquire properties at bases that would have been difficult to achieve several years ago.

The opportunity is not necessarily about perfectly timing the bottom of the market.

Instead, it is about finding individual situations where the purchase basis, financing, property fundamentals, and business plan create an attractive risk-adjusted investment independent of what the broader market does next.

What Multifamily Investors Should Watch

Heading through the remainder of 2026, several factors will continue to influence transaction activity.

Interest rates and lending conditions will remain central because even relatively small movements in borrowing costs can materially affect proceeds and valuations.

New apartment supply and absorption will be especially important in high-growth Sun Belt markets. As the development pipeline slows and existing units are absorbed, the balance between supply and demand could change meaningfully across individual submarkets.

Rent growth and concessions will provide another important indicator. Headline asking rents alone do not tell the entire story; investors need to understand effective rents after concessions and how those incentives affect actual property revenue.

Loan maturities and refinancing activity may also create opportunities as owners determine whether to refinance, recapitalize, contribute additional equity, or sell.

And finally, transaction volume itself is worth watching. More completed sales provide greater price transparency, helping buyers, sellers, lenders, and appraisers establish where the market is actually clearing.

The Bottom Line

The multifamily market is not returning to the environment investors experienced several years ago. It is moving into a new one.

Transactions are increasingly being evaluated based on today’s cost of capital, today’s operating fundamentals, and today’s valuations rather than assumptions built around unusually cheap debt or rapid market appreciation.

For disciplined investors, that can be a positive development.

The opportunities emerging today may require more work, stronger operations, more creative capital structures, and greater selectivity, but they can also provide the opportunity to acquire quality real estate at more compelling bases.

The central lesson from the conversation with Newmark is simple: there is still capital looking for multifamily opportunities, but the deals that attract it need a clear reason to work.

Understanding the individual asset, the submarket, the financing, and the basis matters more than ever.

For investors willing to remain patient and evaluate opportunities property by property, the transition taking place across DFW and Houston could create some of the more interesting acquisition opportunities of the current cycle.