Interest rates are projected to fall and the stock market is showing volatility -- making it a timely reminder that the multifamily market can be a key part of an investment strategy. 

The CBRE 2024 Global Multifamily Investor Intentions Survey found that among all major real estate sectors, “multifamily remained the top acquisition target this year,” it said. 

“Nearly half of the 1,200 global investors surveyed by CBRE in late 2023 said they would primarily invest in multifamily assets and increase their purchasing activity in 2024. Investment activity is expected to pick up in the second half of the year, with more investors considering lower-risk strategies than in 2023.” 

Redwood offers investors more than 30 years of multifaceted development and property management expertise, successfully developing more than 18,000 single-story apartment homes in 156 neighborhoods, many consisting of multiple LLCs, across nine states. 

“We’re committed to investors throughout market cycles, with an approach that adds long-term value,” said Toney Morton, Chief Financial Officer at Redwood. “We’ve been fortunate to work with more than 800 investors in recent years and deliver a deep commitment to the partners who make our projects possible.” 

Here are three key considerations in determining a multifamily investment approach in today’s market. 

Strategic markets prevail 

While investor attention largely focuses on growth areas in the Sun Belt, don’t ignore outstanding Midwest markets known for steady growth and stability. 

“We choose markets for our Redwood Neighborhoods based on in-depth demographic surveys, firsthand knowledge of the geographies and a decades-long track record in most states where we are growing,” Morton said. 

“The ‘Steady Eddy’ markets are having a moment right now with investors, but at Redwood we’ve been committed to them for years.” 

Vertical integration differentiates

Redwood successfully oversees development, construction, debt placement and leasing of all its units, reducing overhead and optimizing efficiency. 

“We believe in our neighborhoods and continue to own and manage nearly all properties we’ve developed over time,” Morton said. “This consistent approach bodes well with investors, team members and residents. We enjoy resident retention that exceeds the industry average and even in today’s record construction development, our portfolio is delivering 95.2 percent* occupancy.” 

As of June 2024, Redwood has successfully secured permanent financing on behalf of the owners of over 175 apartment neighborhood LLCs upon stabilization. For many LLC projects, the net proceeds from the applicable project’s permanent financing was sufficient to return the majority of preferred equity to investors in the project. 

Long-term demographics are favorable 

Put simply, the U.S. has a housing shortage and will continue to experience one for the foreseeable future. 

At the same time, residents of all demographics are gravitating toward the lifestyle afforded by renting. 

“A multitude of factors are aligning in the multifamily industry’s favor, from the cost of housing to lack of inventory,” Morton said. 

“Redwood strategically builds two-bedroom, two-bathroom apartment homes with private, attached garages in suburban markets — giving us broad appeal and positioning investors well no matter how markets fluctuate.” 

Considering investing? 

Redwood has a limited number of current opportunities, including: 

• Redwood Whiteland Whiteland Road IN P1 LLC | Redwood Whiteland will be Redwood’s newest neighborhood in the greater Indianapolis metro area, adding to its 2,400+ unit portfolio in the market and located at a key intersection with excellent visibility. 
  
• Redwood's Flexible Note Program | This opportunity is a way for investors, acting as lenders, to earn a strong yield on their cash through a promissory note, with flexibility on the hold period. By participating, investors receive a 10 percent interest rate for their contribution, and can choose from a 9-month, 18-month or 24-month term. The funds raised will be used for predevelopment costs, real estate acquisition, and preferred equity investments. 

Click here to learn more about both opportunities or fill out the contact form to get connected to a member of Redwood’s investor relations team. 

*Across stabilized properties as of July 30, 2024