Vital Voices
Vital Voices
November’s Vital Voices: Multifamily Outlook 2025: Capital Deployment, Market Shifts, and Emerging Opportunities
Vital Voices
In November’s Issue: Multifamily Outlook 2025: Capital Deployment, Market Shifts, and Emerging Opportunities
The Panel
Moderator
Patti Unti
Portfolio Manager, MONTICELLOAM
Patti Unti is Portfolio Manager at MONTICELLOAM, LLC, with nearly 30 years of commercial real estate experience across debt, equity, asset management, structured finance, and investment banking. She previously spent 14 years at Waterfall Asset Management managing its CRE equity fund and held senior roles at Ventras Capital Advisors, Capmark Investments, and Heller Financial. Patti holds a BBA from the University of Michigan Ross School of Business and an MBA from the University of Chicago Booth School of Business.
Debra Mistretta
Managing Director, BlackRock
Debra Mistretta is Managing Director and Co-Manager of BlackRock’s AMRS Real Estate Equity business. She oversees portfolio, development, and asset management, directly managing $2B+ in properties as Lead Portfolio Manager for the AT&T and NYSCRF accounts, and chairs the AMRS Real Estate Equity Investment Committee. Since joining the firm in 1991, she has held senior roles including Portfolio Manager for a value-add fund. Previously, she was Managing Director of Acquisitions at Insignia Financial Group. She holds a BS in Finance from UMass Amherst, an MBA from Fordham, and is a Certified Managerial Accountant.
Lauren Bresky
Regional Managing Director, Northmarq
Lauren Bresky is Regional Managing Director for Debt + Equity in Northmarq’s Dallas office, where she leads growth in Texas, focusing on multifamily debt and equity placements and managing key lender and borrower relationships. Leveraging Northmarq’s deep capital relationships, she has closed more than $12 billion across all property and transaction types. Lauren joined Northmarq in 2004 as a financial analyst and rose through the ranks to managing director in 2022. She is also a member of the Folsom Institute for Real Estate at her alma mater, Southern Methodist University.
Precilla Torres
Head of Real Estate & Hospitality of the Americas, Natixis CIB
Precilla Torres is Head of Real Estate & Hospitality, Americas at Natixis CIB, overseeing the bank’s real estate lending across capital markets and balance sheet products. With over 30 years of experience at institutions including Ares Management, Lument (Orix), Citigroup, Lehman Brothers, and Credit Suisse, she brings deep expertise in CRE credit, origination, capital raising, and asset management across the U.S. and Asia. A member of the pioneering group that launched the CMBS market, she has built and led platforms on both the buy and sell side.
Patti Unti: Earlier this year, there was a lot of talk about institutional capital sitting on the sidelines. Is that still the case? Has acquisition activity picked up, or is there still significant undeployed liquidity?
Debra Mistretta: At first, private buyers were driving most of the deals, but now we’re seeing institutional capital, especially separate accounts, and to a lesser extent REITs and funds, coming back in. The bid-ask gap has narrowed, so more transactions are closing, even through periods of volatility, like we saw in April after ‘Liberation Day.’ Many ODCE funds have reduced redemption queues and returned to buying, which for us at BlackRock means both more competition and more liquidity in the markets we’re active in.
Lauren Bresky: I agree. Most institutional capital has really been on the sidelines since 2022, given rate volatility, rising costs, and shifting regional dynamics. But now deal activity is starting to pick up as buyers and sellers adjust to today’s pricing. There’s still a lot of dry powder waiting to be deployed, and if the Fed takes a more dovish stance, we could see two to three rate cuts before year-end. That would likely accelerate activity. We’re already seeing institutional acquisitions rise, and I wouldn’t be surprised if volume surpasses the past two years. I expect velocity to gradually increase toward the end of 2025 and more meaningfully into early 2026.
Precilla Torres: From our perspective, while I don’t have hard data, anecdotally the bulk of what we’re seeing is still refinancing, though these are very meaningful in size. That said, there has definitely been an uptick in acquisition loans compared to the past two years, but refinancing still feels like the larger part of activity.
Patti Unti: I think you all captured it well – institutional capital is starting to come back. While we witnessed the bid/ask pricing gap narrow significantly, refinancing requests have been the dominate theme of 2025. I agree that a dovish Federal Reserve will eventually lead to rate stability and an increase in capital deployment in the sector. For 2026, I expect to see a more equal balance in loan request between refinancing and acquisitions.
Patti: Which specific markets are gaining momentum in Multifamily? Some previously challenged markets seem to have shown meaningful improvement over the past year.
Precilla: In terms of lending, it feels like it is across the map. Unlike in past where you saw concentrations in TX or FL, over past 12 months, we’ve seen activity across the country. There is a lot of caution on heavily oversupplied markets, like Austin, downtown LA, Atlanta, which are redlined by some, but others still lending but with meaningful caution on underwriting. Debt funds continue to be active even in these markets at the right levels. FL and other southeast submarkets, a focus over past 12 months for oversupply, have demonstrably absorbed new supply and allowing for some upside in growth.
Lauren: Markets that have moved past peak supply and are supported by steady in-migration and job creation are among the first to show renewed momentum. Early signs of recovery are emerging where deliveries have tapered, and fundamentals are re-stabilizing. Midwest markets such as Chicago or Minneapolis, select Sun Belt markets including Tampa, Orlando, and Dallas, and coastal areas such as Orange County or Boston all stand out, each at a different stage of a rebound.
Patti: What I take away from this discussion is how much more balanced the landscape has become. Recovery is happening at different paces across markets, some are clear comeback stories, others are still working through oversupply, but capital is no longer concentrated in just a few regions. Investors and lenders alike are taking a disciplined, selective approach, which is healthy for our market long term. As fundamentals continue to stabilize, the balance between opportunity and caution should set the stage for more sustained growth heading into 2026.
Debra: I’d agree, to add, New York and San Francisco stand out as the biggest comeback stories. For several years post-COVID, capital was less focused on these markets, but strong fundamentals have drawn investors back. In NYC, vacancy rates are near historic lows, below 3%, and rents continue to rise across the city. San Francisco’s rebound has been even more pronounced. It’s been one of the strongest, if not the strongest leasing market, in the nation this year, and this has drawn investors back.
Patti: In 2025, are you seeing more opportunities and capital flow toward value-add or acquisition-rehab multifamily deals compared to new construction lease-ups?
Precilla: For ’23 and ’24, value-add deals were pretty rare. We’ve started to see some acquisition-rehab activity, but most of the financing demand has been for lease-ups of newly built assets. That’s really just a reflection of the construction boom now hitting the completion phase. Naturally, that creates more lease-up financing opportunities. The challenge on value-add is the economics, cost of capital is high, buyers’ return hurdles are tough, and affordability pressures make it hard to push rents enough to make those deals pencil.
Lauren: That’s true, but we are starting to see more capital come into value-add and acquisition-rehab, especially in strong submarkets where investors can come in at a good basis. New construction is harder to underwrite right now, but in some hotter markets, newly leased-up projects are actually starting to trade. To me, that’s a good sign of confidence creeping back into that part of the market.
Debra: I’d agree, we’re seeing opportunities in both value-add and newer product. A lot of owners would rather sell than put more money in to fix capital stack issues, so we’re seeing more of those assets come to market. Unlevered buyers are sticking to core, and high-quality product from the 2021–2023 window is hitting the market as developers exit. At the same time, lender pressure is creating more value-add situations. Certainty of execution is key, sellers want operators with strong equity partners. We’re leaning into both strategies, and with supply growth slowing, we think rent growth will surprise to the upside. Buying at or below replacement cost is giving us attractive entry points.
Patti: I think you’re all hitting on the same theme, which is the market is in transition. Right now lease-up financing is the natural focus because of all the new deliveries, but we’re also seeing value-add and even core deals emerge as owners reset expectations. We are optimistic that favorable demographic trends paired with slowing supply, should set us up for a healthy lending environment as we move into the next cycle.
Patti: How are you viewing opportunities between high-growth Sun Belt markets and more established gateway cities in the current environment?
Debra: Today we’re leaning into coastal markets, where fundamentals are stabilizing faster and capital is increasingly flowing. We’re also active in the Sun Belt, and we’ve got a constructive long-term view there. Demand and absorption are holding strong, supported by employment growth and the lifestyle benefits that continue to drive population growth. In these higher-supply markets, we’re disciplined, underwriting carefully around concession burn-off and being very selective on new investments, depending on product quality and submarket.
Precilla: For us, it really comes down to underwriting on a deal-specific basis. We’re looking at both types of geographies and tailoring our assessment to the unique market dynamics. The fundamentals we focus on are the sustainability of cash flow and whether underwriting assumptions are realistic. We also weigh the headwinds, like rent regulation risks in New York versus supply pressure in Florida and then balance that with demand drivers and expense concerns, like rising labor costs in the Northeast and West Coast gateway cities, which immigration has historically helped offset.
Patti: I agree with the sentiment – each market offers something different, and the key is being disciplined, selective, and realistic about the risks and growth drivers. Whether it’s the Sunbelt, coastal markets, or gateway cities, investors should be focused on building resilient portfolios that can weather near-term challenges while positioning for long-term growth.
Lauren: I’d say both types of markets bring opportunity, just with different profiles. The suburban Sun Belt is seeing strong momentum, with a lot of upside beyond the near-term supply growth. On the other hand, gateway cities give you steadier, lower-risk returns. I think the best approach is a balance, having exposure to both. And let’s not overlook the opportunities along the path of future development, which can be just as exciting.
Patti: For women looking to advance in commercial real estate in multifamily, what advice would you give on building industry relationships, navigating market cycles, and positioning themselves as leaders?
Lauren: Building knowledge and expertise in your field is what establishes credibility with clients and peers. You have to be persistent and adaptable because this market is always shifting. Relationships are key; they help shape and guide your path. Building trust with clients and colleagues is invaluable, and it is important to strategically identify networks where you can cultivate long-term connections.
Debra: I would add that prioritizing relationships is just as important as developing technical skills. This is a people-driven business, and the connections you make early often turn out to be pivotal later in your career. The market runs in cycles, so it is important not to get discouraged when it slows down. Those periods are when you develop resilience and prepare for the upswing. To the women entering this industry, your voice and perspective matter. Speak up and lean into leadership opportunities, even when they feel uncomfortable. Also, actively seek out mentors and sponsors. That requires initiative, but the guidance and advocacy they provide can make a lasting difference.
Precilla: It is also important to be intentional. Have a five-year plan and start mapping relationships that will help you reach that goal. Begin with female mentors within your company but also build externally through industry organizations such as CREFC.
Patti: These are great thoughts, and I would emphasize that success in this industry comes from the combination of knowledge, relationships, and intentionality. Technical skills and market expertise will open doors, but your ability to adapt, build trust, and create meaningful connections will carry you through challenges and opportunities. A clear vision for where you want to go coupled with staying flexible enough to embrace unexpected opportunities can shape your career in powerful ways. Most importantly, remember to pay it forward. As you grow, take the time to mentor and support the next generation, because investing in others is how we strengthen the industry as a whole.
Conclusion
The market is clearly in transition, defined by greater discipline, selectivity, and a healthier balance between refinancing and acquisitions. Recovery is uneven across geographies, but capital is no longer confined to a handful of regions, and investors are positioning with more realism and long-term focus.
While lease-up financing remains the natural priority given the wave of new deliveries, value-add and core opportunities are also re-emerging as expectations reset. Looking ahead, a combination of stabilized fundamentals, slowing supply, and disciplined capital should support a more sustainable growth cycle into 2026.
Ultimately, success will come not only from market expertise, but also from relationships, adaptability, and a commitment to paying it forward, because strengthening the next generation of leaders is what ensures the resilience of the industry as a whole.