Key Differences Between Multifamily & Other CRE Sectors

Apartments have a long track record of having the highest risk-adjusted investment returns compared to other property types. The sector has proven to be most resilient during economic downturns, delivering superior returns during recessionary periods.

Source: Explaining the Puzzle of High Apartment Returns, NMHC research Foundation

5yr Holding Period Returns (1987 - 2016)

10A

10yr Holding Period Returns (1987 - 2016)

10B

Overview of CRE Sectors

Commercial real estate (CRE) encompasses a wide range of property types, including:

18

Multifamily V.S. Other CRE Sectors

Tenant Type Residential Tenants Commercial Tenants
Lease Terms Shorter Terms Longer Terms
Maintenance & Management Intensive Easier
Capitalization Rates Lower Higher
Financing More Debt Options Less Debt Options
Tax Depreciation 27.5 Year Schedule 39 Year Schedule
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