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NMHC Annual Meeting Recap: 2025 Industry Trends Align with IMG’s Market Expectations
Woodland Hills, CA— January 31, 2025— Investors Management Group attended the 2025 National Multifamily Housing Council (NMHC) Annual Meeting in Las Vegas. Recognized as the largest multifamily conference of the year with attendance over 10,000, NMHC brings together industry leaders for educational presentations, private meetings and networking.
The prevailing sentiment at this year’s conference was one of cautious optimism. While 2024 presented significant challenges—including rising borrowing costs, cap rate expansion, and rent stagnation—most believed 2025 will mark a turning point. Operators mentioned that new rental housing supply is absorbing at a reasonable pace, and as new deliveries slow, occupancy and rents should see gains over the next 12 to 18 months. These sentiments reflected IMG’s perspective going into the conference, and the experiences of other owners and investors reinforced that outlook.
Market Dynamics & Transaction Activity
Brokers expected deal flow to increase marginally compared to last year, though transaction volume remains limited. A key theme was the expectation that bid-ask spreads will narrow, leading to more sales in 2025. However, most owner/operators expressed a preference to buy rather than sell, with the majority of anticipated sales expected to come from distressed assets or those facing loan maturities. Many industry experts agreed that the “pretend and extend” strategies of recent years may be less viable moving forward as lenders have become less accommodating with exceptions to loan requirements.
Interest Rates & Financing
There was no clear consensus on the trajectory of interest rates, with opinions split between expectations for rate cuts, stability, and increases. However, most agreed that any meaningful movement in rates would likely occur later in the year. Lenders remain divided on how financing conditions will evolve, with some expecting easing borrowing costs while others foresee continued constraints in credit availability.
Rent Growth, Underwriting & Operational Challenges
Rents have remained largely flat, requiring conservative underwriting for future rent growth. Many industry participants anticipate a gradual improvement, though any significant rent appreciation is contingent on the pace of supply absorption and the slowdown in new development.
Operational challenges such as fraudulent applications and non-paying tenants were also major discussion topics. IMG has been proactive in fraud prevention, staying ahead of industry trends. Many groups sought our insights and expertise to strengthen their own fraud detection and mitigation strategies, recognizing the value of our forward-thinking approach.
Equity & Investment Strategies
While equity investors are eager to deploy capital, their return expectations remain misaligned with market realities. The expectation for high IRRs is softening to accommodate more conservative underwriting of future income growth and exit cap rates. The industry remains hopeful that as 2025 progresses, equity players will further recalibrate and engage in more transactions.
In summary, the general opinion among NMHC attendees was that 2024/2025 should mark the cycle bottom with better days ahead. Prospects for higher property value, more transactions and stronger operating environments grow through this year and beyond. IMG continues to navigate market dynamics with a strategic and disciplined approach. The best investment results for clients will come from our focus on tight operations, executing on financing opportunities, and strategically timing sales and acquisitions as the market allows.