Real Estate Built for This Moment: Multifamily and Industrial Show Lasting Strength

As real estate investors contend with one of the most unpredictable macroeconomic backdrops in recent memory, two asset classes are showing particular resilience: multifamily and industrial. Amid renewed inflationary pressures, high interest rates, and geopolitical instability, these sectors are not only holding their ground—they're gaining strength.

At Walker & Dunlop Investment Partners (WDIP), we believe today’s uncertainty isn’t a reason to pause. It’s a reason to be precise. In multifamily and industrial real estate, the fundamentals support a forward-leaning strategy grounded in discipline, adaptability, and long-term value creation.

Multifamily: Absorption Climbs as Construction Crests

After a period of imbalance driven by a wave of new construction, the U.S. multifamily market is rebalancing. In Q1 2025, national apartment absorption hit 130,000 units—the second-highest quarterly total on record—pushing vacancy down to 8.1%. The shift is driven by:‍

• ‍‍‍Slowing supply: While 125,000 units were delivered in Q1, the pipeline is thinning. New starts have dropped to decade lows, with deliveries expected to decline to just 80,000 units by Q4.
• ‍Expanding rental demand: With mortgage rates elevated and homeownership affordability constrained, more Americans are renting longer. This is not a cyclical phenomenon—it’s structural, and it’s broadening the renter base.‍
• Firming rent growth: As the supply-demand imbalance corrects, rent pressure is likely to return, especially in high-growth metros and submarkets with thin pipelines.

While certain markets are still digesting a record development cycle, the broader picture points to improving fundamentals. For investors with a long-term view, this represents a key inflection point—a chance to acquire or reposition assets while fundamentals reset.

Industrial: Performance Driven by Size and Location

Industrial real estate continues to be one of the most reliable performers. In Q1, the sector posted 4.3% year-over-year rent growth and held a solid 7.0% vacancy rate—even while absorbing 43 million square feet of new space.

However, industrial isn’t monolithic. A growing bifurcation is emerging:

• ‍Large-format (250,000+ sq ft) assets are softening, with vacancy topping 10% in some markets. These properties are facing pressure from overbuilding, tenant scrutiny, and logistical shifts.‍
• Smaller industrial (<100,000 sq ft) assets are performing exceptionally well, with a national vacancy rate of just 4.1%. These spaces are critical for last-mile distribution, regional warehousing, and light manufacturing.
  

Notably, just 35% of new deliveries in Q1 were under 300,000 square feet—pointing to a continued mismatch that favors smaller, more adaptable assets.

Building Resilient Portfolios in an Uncertain World

Macroeconomic volatility isn’t subsiding. Ongoing global conflicts, shifting U.S. trade policy, and persistent inflation have created an increasingly unpredictable environment. Some economists warn of stagflation; others of slowdown.

At WDIP, we don’t try to predict the next turn—we prepare for it. Our approach includes:

• Stress-tested underwriting across scenarios
• Diversification by asset type, market, and structure
• Value creation through hands-on asset management
• Flexibility to adjust as markets evolve

By focusing on sectors grounded in durable demand and practical utility, we aim to build antifragile portfolios—strengthened by disruption, not weakened by it.

If you're exploring where current dislocation meets long-term opportunity, connect with the WDIP team. We're here with insights, capital strategies, and a clear path forward.

‍^{This article is for informational purposes only. Nothing herein is an offer or solicitation for the purchase or sale of any security and may not be relied upon in connection therewith. Private real estate investments involve risk of loss; past performance is not indicative of future results. WDIP investment strategies are available only to sophisticated accredited investors. Any opinions and forward-looking statements are that of the presenters are subject to change. Neither Walker & Dunlop nor WDIP are market-makers in securities.}