Gray Capital Releases First Rent Growth Report

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Aug 08, 2023, 09:30 ET

Report explores rent growth changes in 2023; among the most powerful shifts ever recorded.

INDIANAPOLIS, Aug. 8, 2023 /PRNewswire/ -- Gray Capital, a family-owned and operated private equity real estate firm specializing in multifamily apartments in growing markets throughout the Midwest, today announces the release of its Rent Growth and Multifamily Performance in 2023 Report, which explores the drastic shifts in rent growth over the past year, with short- and long-term predictions. The report also highlights the contradictions between CPI measurements and current asking rents and includes insights on key factors driving rent growth trends nationally and within specific markets.

According to Gray Capital's analysis, year-over-year rent growth may be trending down, but month-over-month trends indicate positive momentum since the early months of 2023. Rent growth will continue to moderate from an all-time high last year, but is expected to accelerate into 2025, with a faster recovery in markets with less incoming apartment supply, such as Indianapolis, IN. There is ample opportunity for investors, especially in affordable markets in the Midwest, which are outperforming expensive markets in the West and South.

"We are in the wake of the largest change in rent growth in recorded history," said Spencer Gray, CEO of Gray Capital. "While there has been optimism about the economy generally, apartment rent growth continues to shift in moderation on a national level, with some regional variations. If the employment environment remains positive, we expect continued stability in the multifamily market and steady improvement as 2024 progresses."

Market-rate rent growth has gone from near-record year-over-year highs in 2022 to negative growth this year. These unprecedented shifts in apartment asset performance require greater attention to the tools used to measure rent growth. There is currently no single authority on rent growth, and this has presented challenges for measuring rent growth in the midst of the rapid, transformative changes in the apartment market. Different regional distribution, means of obtaining data, and volume of information are just some of the factors that lead to these diverging rent growth measurements. Comparing these different data sources helps to reveal key rent growth trends, which is particularly important given that the Consumer Price Index's rent growth measurement lags the current market by roughly one year.

Gray Capital is an industry leader in aggregating and disseminating market trends, consistently following rent growth from eight separate rent trackers alongside the Consumer Price Index (CPI) Rent of Primary Residence measurement, and comparing the data sources to reveal valuable observations. Gray Capital has compiled data from the Bureau of Labor Statistics (BLS)'s Consumer Price Index (CPI), Zillow, Redfin, Apartment List, Yardi Matrix, Apartments.com, Zumper, Zillow, and RealPage to inform the expert insights within the report. By disseminating this aggregated data, Gray Capital allows multifamily investors and consumers to understand the shifts within the multifamily industry in order to make informed decisions driven by real market insights.

To learn more about rent growth and multifamily performance, download the full report here. To learn more about Gray Capital, visit www.graycapitalllc.com or follow Gray Capital on Instagram and LinkedIn.

ABOUT GRAY CAPITAL
Gray Capital LLC is a real estate investment firm that specializes in the acquisition and management of high-quality assets in growing Midwestern cities. The firm's investment strategy is opportunistic, with a focus on Core Plus and Value Add opportunities. Gray Capital leverages data, broker, lender, and owner relationships to source off-market opportunities, and pursues high-quality assets in financial distress due to financing. The firm's target demographic is above-median income, and it employs fixed-rate agency and HUD financing.

SOURCE Gray Capital