For the first time in two years, financial and operational metrics are improving for Class-A multifamily properties, says CBRE.

"Going-in cap rates, exit cap rates and unlevered internal rates of return (IRRs) targets for prime multifamily assets improved slightly in Q1 for the first time since the Federal Reserve began raising interest rates in early 2022," they wrote. "These improvements indicate that key underwriting metrics may have peaked in anticipation of possible rate cuts later this year."

The change in going-in and exit cap rates was slim, standing at 12 basis points in 2024 Q1. But it was still the first time, after eight consecutive quarters, for a positive stance since the Fed began raising interest rates in 2022 to fight inflation.

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