As economic uncertainty and interest rate volatility have dominated headlines over the past year, investors in Western Michigan's multifamily sector are playing it safer.
This was shown in a fourth-quarter market analysis report by Colliers. While the overall vacancy in Western Michigan, which includes Traverse City, Grand Rapids, Battle Creek and Lansing, climbed to 6.2 percent, the rate among stabilization properties dropped by 20 basis points from the previous three months to 5.1 percent. This trend underscores "healthy fundamentals across established communities," according to Colliers.
The trend is similar in terms of multifamily sales, as investors remain focused on scooping up stabilized assets.
"Sales activity slowed in the fourth quarter, with volume reaching $112.4 million, down from the prior quarter’s pace," Colliers said.
"Despite this pullback, rolling four-quarter totals climbed to $668.8 million, signaling that investor confidence is gradually returning. Buyers remain focused on stabilized assets in core submarkets as underwriting adjusts to interest rate conditions."
The top sale involved 150-unit Rivertown Ridge Senior Living in Grandville, going for $40.95 million. The runners-up were Meadow Springs Apartments and Bayberry Farms Apartments, trading hands for $28.4 million and $24.5 million, respectively.
That came as rents, although up 2.4 percent year-over-year to $1,360, the growth decelerated from the 2.8 percent seen in the fourth quarter of 2024. That was a result of "affordability considerations" and a supply surge, as deliveries hit 661 units in the fourth quarter, according to Colliers. Also, construction increased to 5,691 units compared with 3,553 a year ago.
According to Colliers, multifamily pricing in West Michigan is the strongest in Lakeshore and Northwest Michigan, as well as in mid-sized assets that are located in walkable neighborhoods.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.