US Apartment Rents, Occupancy Rise in February

US apartment rents rose 0.41% in February, signaling a multifamily rebound despite rent cuts in oversupplied areas.

Jordan B.
March 12, 2025

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Good morning. The U.S. apartment market saw a slight uptick in rent growth and occupancy in February. Plus, self-storage development is expected to shrink to 2% of total inventory by 2027.

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Market Snapshot

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Pct Chg:
-0.76%

FTSE NAREIT

FNER

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10Y Treasury

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-0.008

SOFR

30-DAY AVERAGE

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Pct Chg:
0.0%

*Data as of 03/11/2024 market close.

MULTIFAMILY MOMENTUM

US Apartment Rents And Occupancy Rates Rise in February

The U.S. apartment market saw a slight uptick in rent growth and occupancy in February, signaling early signs of stabilization after nearly two years of sluggish performance.

Small momentum: Market-rate apartment rents increased by 0.41% in February, according to RealPage Market Analytics. While this figure remains below the long-term February average of 0.53%, it marks the strongest February reading since 2022. On an annual basis, effective asking rents grew 0.8%, the highest YoY increase since July 2023.

Occupancy inches upward: National apartment occupancy rose to 95%, up 10 basis points (bps) month-over-month and 90 bps year-over-year. Notably, high-supply markets like Phoenix, Fort Worth, and Orlando saw 20-bps occupancy gains, despite struggling with rent cuts. About 80% of major U.S. markets reported month-over-month occupancy increases, hinting at growing demand catching up with supply.

Winners and Laggards in Rent Growth

Chicago led the nation with a 4.2% annual rent increase, followed by Richmond (3.7%), Pittsburgh (3.3%), San Jose (3.3%), and Washington, DC (3.2%).
Austin remained the weakest market, posting a 7.2% annual rent decline, though its 0.15% monthly drop was the mildest in nine months.
One-third of the top 50 markets still saw annual rent cuts, mainly in areas with significant new supply.

Concessions on the rise: The use of rental concessions—such as free rent—increased slightly by 1% YoY. The South led in discount offerings, with Cape Coral, San Antonio, Crestview-Destin, and Myrtle Beach having at least 25% of vacant units offering incentives.

➥ THE TAKEAWAY

Looking ahead: While rent growth remains below historical averages, demand is picking up as the construction pipeline slows. Expect continued stabilization in 2025, with occupancy gains supporting a gradual return to stronger rent performance—especially in supply-heavy markets finally seeing absorption catch up.

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✍️ Editor’s Picks

Small lot housing: Los Angeles launched a design contest for a pilot program to build affordable homes on 10 small vacant lots, aiming to address housing shortages.
Across the pond: CareTrust REIT is entering the UK market with an $817 million acquisition of Care REIT plc, adding 137 care homes and 7,500 beds to its portfolio as it bets on a growing senior housing demand.
Maximize efficiency: The right CRM can completely transform how your team manages deals and properties. Check out CRE Daily’s buyer’s guide to the best CRMs on the market. (sponsored)
Affordable rentals: Investment giant Pretium is launching its first fund to acquire and renovate single-family homes for affordable rentals, leveraging the Section 8 housing program.
See Ya Later: CrowdStreet’s Chief Investment Officer, Ian Formigle, has exited the firm amid ongoing scrutiny over a fraud scandal involving Nightingale Properties.
Tariffs halted: President Trump will not impose a 50% tariff on Canadian steel and aluminum imports after Ontario pauses its 25% electricity export tax to the US.

🏘️ MULTIFAMILY

Waiting longer: New apartments are taking longer to rent, with only 50% leased within three months, while studio apartments are renting faster due to limited supply.
Homestead townhomes: Canero Group plans 54 townhouses in Homestead, targeting locals forced out by Miami’s luxury boom, with prices starting at $500K.
Up for auction: Post Brothers’ office-to-residential conversion at 2100 M Street NW is heading to a foreclosure auction after defaulting on a $77.9M loan.
Luxury launch: Zeckendorf Development and Atlas Capital are quietly launching sales at 80 Clarkson, with 22 ultra-luxury units targeting a $2B sellout.
Facing foreclosure: Madison Realty Capital and landlord Ved Parkash face foreclosures, with Parkash owing $20M and Madison carrying $157M in debt.

🏭 Industrial

Self-storage slows: US self-storage development is expected to shrink to 2% of total inventory by 2027, with a 20% drop in 2024 construction starts due to rising costs and financial constraints.
Class B demand: Class B industrial properties remain in high demand due to strategic locations and modernization efforts, with growing interest from small tenants and e-commerce.
In the name of industry: Ambrose closes its largest fund, Ambrose IV, at $400.6M, targeting industrial developments and acquisitions across the country.

🏬 RETAIL

Strong demand: Single-tenant net lease properties remain a compelling investment in 2025, thanks to their stability and strong tenant demand, despite challenges in the retail sector.
Offloading assets: Seven & I (SVNDY), the parent of 7-Eleven, is negotiating a potential sale of 2K US Circle K stores due to antitrust concerns with Alimentation Couche-Tard’s $47B offer.
Mixed outlook: The retail sector faces diverging trends, with strong demand in grocery, beauty, and gyms, but challenges in drug stores and furniture, amid rising occupancy costs and inflation pressures.
Fitness clubs in lead: Fitness clubs saw over 4% YoY growth in Q4 store visits, with major chains seeing more visits and higher average visits per location.

🏢 OFFICE

The next step: Companies are moving away from strict RTO policies, focusing on optimizing office space for hybrid work, with rising demand for flexible layouts and coworking spaces.
Coworking growth: Industrious signed a 20K SF lease for the second floor at Rudin's 560 Lexington Avenue, offering 158 seats in Manhattan.
From A to Z: Amazon (AMZN) signed a 193K SF lease at RXR and Walton Street Capital’s 237 Park Avenue in Manhattan.
Manhattan on top: Manhattan's office sector saw 76% more sales YoY, with 11.3M SF transacted, though average prices dipped to $363.62 PSF as discount deals cropped up.

🏨 HOSPITALITY

Theme park confidence: Loews Hotels & Co. (LOW) is investing $1B to open three new hotels near Comcast's Epic Universe theme park in Orlando, adding 2K rooms to meet growing tourism demand.
Hitting Restart: Related California is moving forward with plans for a 41-story office-hotel tower at 530 Sansome Street, San Francisco, amid a recovery in the city’s office market.
Focused on conversions: Due to high construction costs, Extended Stay America plans to add 20 properties this year, primarily through conversions, allowing faster market entry and lower costs.

📈 CHART OF THE DAY

Americans are falling behind on car payments at the highest rate in decades, with 6.6% of subprime borrowers 60+ days overdue as of January 2025.

Rising vehicle costs, high loan rates, pricier insurance, and steeper maintenance costs are all driving this trend. The last time Americans were so bad at paying their auto bills was nearly 30 years ago (1997).