Stabilized Assets Continue to Outperform as Supply Normalizes

The multifamily market is becoming more balanced as apartment construction slows and renter demand remains resilient. While markets are still absorbing the wave of new apartment deliveries from the past two years, conditions across BAM Capital’s core markets remain encouraging.

Here’s a look at the latest national data and what we’re seeing across our portfolio markets.

The Big Picture: The Midwest Stands Out

National advertised rents rose $6 in May to an average of $1,767, and annual rent growth ticked up to 0.2%, according to Yardi Matrix. After a surge of apartment completions over the past two years, national occupancy slipped to 94.1%—its lowest level since 2013—as the market continues absorbing new supply.

The Midwest continues to tell a different story. The region recorded the strongest rent growth in the country at 2.2% year over year, with Kansas City ranking among the nation’s top-performing markets.

PGIM’s latest U.S. Real Estate Views highlights a clear shift in renter demand toward newer apartment communities, with properties built in 2016 or later continuing to post positive net absorption while older buildings have lagged. The report also suggests this cycle will be driven more by property income than appreciation—relying less on cap-rate compression than in prior years—though macro factors and local market conditions will naturally continue to influence ultimate outcomes.

For BAM Capital, that aligns with a focus on stabilized Class A communities in markets supported by durable job growth and long-term housing demand.

Indiana: Job Growth Continues to Drive Demand

Indiana remains in a solid position, with supply and demand staying largely in balance. Indianapolis rents are still running ahead of last year’s levels, and occupancy at stabilized properties has remained in the low- to mid-90% range.

The development pipeline is beginning to cool after several years of elevated construction, setting a supportive backdrop for easing supply pressure as recently completed communities absorb, although actual lease-up timelines will vary based on ongoing local demand. Indiana also continues to benefit from an unemployment rate below the national average, providing a steady base of renters.

Economic development remains active across Central Indiana. Boston Scientific recently announced a $138 million distribution facility in Plainfield that is expected to create up to 300 jobs, while Corteva Agriscience selected Indianapolis as the headquarters for its new crop-protection company. Ongoing investment in manufacturing, logistics, and infrastructure continues to strengthen the region’s long-term outlook.

For BAM Capital’s Indiana portfolio, those trends point to stable occupancy and a favorable operating environment.

Des Moines, Iowa: New Supply Is Being Absorbed

Des Moines is making steady progress through its recent construction cycle.

Over the past year, apartment demand has slightly outpaced new deliveries, and the amount of new construction underway has fallen to less than 2% of existing inventory. As construction slows, newer communities have begun reporting stronger occupancy, improving leasing conditions across the market.

The area’s broader economy also remains healthy. Greater Des Moines is approaching one million residents, and more than $7.7 billion in active and planned investment is expected to support future employment and population growth.

As supply pressure eases, market fundamentals should continue improving through the remainder of the year.

Kansas City: Rent Growth Remains Strong

Kansas City continues to post some of the strongest apartment fundamentals in the Midwest.

Vacancy is estimated to decline for a third straight year as new construction falls to its lowest level since 2019. With fewer new communities entering the market, existing properties are operating in a favorable environment for pricing power and continued rent growth, though localized supply dynamics and operational factors will continue to play a key role.

The region is also benefiting from significant private investment. Construction recently began on Mattel Adventure Park, part of a $539 million mixed-use tourism district expected to support long-term job growth across hospitality, retail, and entertainment.

For BAM Capital communities such as Altitude 970 and Kinsley Forest, these trends provide a supportive backdrop for occupancy and revenue growth.

Northwest Arkansas: Growth Continues to Create Housing Demand

Northwest Arkansas remains one of the fastest-growing regions in the country.

Although apartment deliveries are still elevated, occupancy has held up well as population growth continues to generate new housing demand. Thousands of additional units remain under construction, but leasing activity has remained resilient despite elevated supply.

The region is also investing in its future workforce. A new initiative backed by the Walton Family Foundation is designed to better connect employers with local talent as Northwest Arkansas prepares for 50,000 projected job openings over the coming years.

The combination of population growth, job creation, and long-term employer investment continues to make the region attractive for multifamily owners.

Pittsburgh: Limited New Supply Supports Stability

Pittsburgh continues to benefit from one of the more restrained construction pipelines among major U.S. markets.

Occupancy remains healthy, while the number of apartments under construction has declined significantly from late 2025 levels. With fewer new properties entering lease-up, existing communities face less competitive pressure than many peer markets.

The local economy is also becoming more diversified. Recent investments from Hitachi Energy, GE Vernova, and TECfusions are expanding the region’s presence in energy infrastructure and AI-related industries while adding high-skilled jobs.

Those dynamics create a stable operating environment for BAM Capital’s Pittsburgh portfolio.

What We’re Watching

The June data points to a market gradually finding its footing after an unusually active construction cycle. Several themes continue to stand out, including continued rent strength in the Midwest, slowing apartment construction across BAM Capital’s core markets, sustained demand for newer communities, and ongoing support from job growth and business investment as new supply continues to be absorbed.

While the rapid rent growth of the past cycle is unlikely to return in the near term, improving balance between supply and demand should support more stable operating conditions over time. For BAM Capital investors, the outlook across our core markets remains encouraging as the multifamily market moves into its next phase.

 

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