Institutional investors have remained on the sidelines for most asset classes this year, including their erstwhile darling multifamily. But a new analysis by Institutional Property Advisors suggests they will return in force in the second half of 2023. That will largely be due to the long-expected end to interest rate hikes by the Federal Reserve, which should introduce some stability in rates as well as some much-needed price discovery. “Considerable dry powder has been accumulating and is primed to be deployed,” according to IPA. 

Of course, even just a little more activity will be welcome to the space. Based on preliminary estimates, transaction velocity in the $15 million-plus category during the first half of 2023 was down about 65 percent from the opening six months of last year, IPA says. 

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