By Nick Matus, President & Chief Operating Officer, Benedict Canyon Equities
and Joe Austin, Director, Capital Raising, Benedict Canyon Equities
Commercial real estate has traditionally offered investors steady cash flow, reduced volatility, portfolio diversification, and the potential for outsized returns. Among its various subsectors, multifamily real estate—specifically workforce housing—stands out as a differentiated investment in today’s evolving market.
The Current Landscape: A Unique Opportunity for Multifamily
Workforce housing, or Class B multifamily, serves hard-working Americans priced out of homeownership who are unable to afford luxury rentals. Shifting economic and housing market dynamics have made this segment particularly attractive with its stable demand, limited supply, and rent growth potential. Further attributes of today’s opportunity set include:
Surging Homeownership Costs: Since 2020, U.S. home prices have risen 47%, making owning a home $1,066 more expensive per month than renting. This affordability gap is driving sustained demand for rental housing, especially in workforce housing.
Development Constraints: Regulatory hurdles, high construction costs, and “Not In My Backyard” (NIMBY) opposition discourage new workforce housing developments, limiting supply. Instead, developers focus on Class A properties to achieve higher returns, exacerbating the shortage of affordable rentals.
Declining Property Values: Multifamily asset values have dropped 28% since their peak, according to Green Street Advisors. With prices now below long-term trends, investors can capitalize on this market correction. Additionally, rising cap rates suggest stable operating income even as values decline—a strong signal of future recovery.
Loan Maturities Driving Sales: By the end of 2025, $84.3 billion in multifamily loans will mature[1], with many owners struggling to refinance due to higher interest rates and falling property values. This financial strain is pushing more assets to market, creating acquisition opportunities for well-capitalized investors.
Declining Deliveries: New multifamily units will continue to be delivered through 2025, but a substantial reduction in new completions is projected for 2026 and 2027 (Source: Jay Parsons). Prolonged economic headwinds are likely to further deter new development, with most projects that proceed skewing toward Class A to offset elevated construction costs. This underscores how workforce housing will remain constrained in supply, signaling an accretive buying opportunity followed by a period of growth.
Adding Multifamily to Portfolios
The next 12–36 months represent a critical window to acquire high-quality workforce housing assets at favorable prices. BCE’s value-add approach focuses on selecting markets with strong fundamentals and enhancing properties to maximize returns for investors. Our proven track record and commitment to the asset class gives us confidence that now is the time to add multifamily real estate into portfolios.
