Overall, Fresno, California's multifamily sector features solid fundamentals, as limited new supply enters the market.
But there's certainly nothing short of demand, as net absorption surged by 70 percent year-over-year in the second quarter to 741 units, a market report from Colliers finds. That's well above the historical average of 354 units.
Vacancy came in 43 basis points lower at 4.5 percent, below the historical average of 4.9 percent.
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While those are two good signs, Colliers pointed out that rent growth, although positive, did slow down with just a 1.78 percent gain to $1,458. The CRE firm noted that's "down significantly from highs in 2021."
According to Colliers, the slow rent growth is partially limiting building, along with high costs. Multifamily units under construction in Dallas tumbled by 84 percent in the second quarter to just 96. Also, deliveries were down to 523 from 785.
Another thing that slowed down was sales, which hit a volume of just $58 million, down from the historical average of $134.7 million. Most of the deals were smaller in volume, as just four transactions exceeded $5 million.
"The lack of sales activity is mostly due to fears that valuations have yet to bottom out," Colliers said.
"Investor activity in the region is not expected to increase rapidly in 2025, as additional increases in cap rates are expected to rise throughout the remainder of the year."
Private investors made up most of the acquisitions (85 percent).
The largest sale involved Lofts at Stadium Square, trading hands for $30 million.
Going forward, Colliers noted that the return of the 100 percent bonus depreciation, a tax incentive for qualifying properties, could reshape real estate investment. In the past couple of years, the percentage has been phasing out — but now the One Big Beautiful Bill Act makes the 100 percent level permanent. So, how CRE investment activity responds in the coming months will be a trend to watch.
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Anthony Russo
Anthony Russo has been contributing to GlobeSt. since July 2024. Along with CRE, his financial background expands to capital markets, the economy, and consumer issues. Previously, he has written for CapitalWatch and was a senior reporter for The US Sun.
