Apartment Market Shows Early Signs of a Turnaround

A second straight month of rent and occupancy gains suggests apartment fundamentals may be stabilizing.

Nina Dale
March 05, 2026

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Good morning. After a sluggish stretch last year, the apartment market is showing early signs of normalcy. February marked the second straight month of gains in both occupancy and rents.

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🎙️Must Listen: QC Capital founder Chris Salerno explains why investors are moving beyond multifamily and into car washes and small-bay industrial.

CRE Trivia 🧠

Where can you find a full-size replica of the Parthenon in the United States?

(Answer at the bottom of the newsletter)

Market Snapshot

S&P 500

GSPC

6,869.50

Pct Chg:
+.050%

FTSE NAREIT

FNER

828.99

Pct Chg:
+0.18%

10Y Treasury

TNX

4.109%

Pct Chg:
+0.027

SOFR

30-DAY AVERAGE

3.67%

Pct Chg:
-0.00

*Data as of 3/4/2026 market close.

Improving Fundamentals

Apartment Market Shows Early Signs of a Turnaround

The U.S. apartment market is showing signs of stabilization as occupancy and rents posted their second straight monthly increases, signaling a return to more typical seasonal patterns.

By the numbers: According to RealPage, apartment occupancy reached 94.8% in February after rising 10 bps in both January and February. The gains follow several months of declines in the back half of 2025. Even so, occupancy remains 10 bps below year-ago levels and about 90 bps below the April 2025 peak.

Return to normalcy: Jay Parsons said the data points to a return to typical seasonal patterns. “February marks a continuation of a trend we've seen all winter — normality,” Parsons said. “It's not a big boom, but after a weaker-than-usual summer and fall, we've seen four straight months of seasonally normal-ish numbers.”

Rents tick higher: Effective asking rents rose 0.3% in February from January, marking a second straight monthly increase after seven months without growth. Still, rents remain 0.4% below year-ago levels as the market absorbs a wave of new supply.

Sun Belt pressure: Rent cuts continued across much of the South and West as operators compete to maintain occupancy amid elevated supply. The South has now gone nearly three years without annual rent growth, with Austin, Denver, Phoenix and Charlotte among the markets seeing the steepest declines.

Coastal tech hubs outperform: San Francisco, San Jose and New York led the top 50 U.S. markets with annual rent growth of 4.5% to 9% through February. Other strong performers included Virginia Beach and Midwest metros such as Chicago, Cleveland, Cincinnati, St. Louis, Minneapolis and Kansas City.

Supply turning point: Parsons said the improving performance aligns with slowing deliveries after years of heavy construction. “That correlates with declining levels of new supply,” he said, adding that if the trend continues through the spring and summer leasing seasons, it should strengthen apartment fundamentals.

➥ THE TAKEAWAY

Steady improvement: The apartment market isn’t surging, but it may be stabilizing. As supply eases and seasonal leasing patterns return, steady improvement in occupancy and rent growth could follow through the rest of 2026.

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✍️ Editor’s Picks

Inside AI adoption: CRE Analyst is building the industry's most credible AI adoption report. Professionals from Blackstone, JLL, Greystar, and Brookfield have already weighed in. Five minutes. Anonymous. Free report access. (sponsored)
Extension effect: February’s CMBS delinquency rate declined as large office and retail loan extensions reduced newly delinquent balances.
Activity rebound: LightBox’s CRE Activity Index jumped 28% in January to 110.7, signaling stronger listings, appraisals, and environmental diligence as transaction momentum improved.
Hidden costs: Nobody gets into real estate to chase down payments and reconcile spreadsheets. But that's where a lot of GPs end up — and it's costing them more than they think. (sponsored)
Credit warning: Wall Street executives warned that private credit’s rapid growth may obscure risks tied to leverage, liquidity, and opaque valuations across the expanding asset class.
REIT rally: U.S. REITs outperformed broader equities in February as investors rotated into real estate securities amid shifting rate expectations.
Investor ban: The U.S. Senate advanced a housing bill that would bar institutional investors from purchasing certain single-family homes as lawmakers target supply and affordability concerns.
Redemption surge: Blackstone’s BCRED faced a record $7.9B in investor redemption requests, testing liquidity controls as private credit vehicles confront rising withdrawal pressure.

🏘️ MULTIFAMILY

Loan probe: Flagstar Bank and JPMorgan Chase face scrutiny over loans tied to rent-stabilized NYC properties as regulators investigate underwriting tied to expected rent increases.
Miami launch: NR Investments broke ground on a 190-unit affordable housing project in Miami’s Little River neighborhood, adding below-market apartments amid rising regional housing costs.
Supply crunch: Several major U.S. apartment markets face limited 2025 supply pipelines as construction slowdowns threaten to tighten vacancy and support rent growth.
Care challenge: Assisted living demand growth depends on affordability, labor availability, and consumer preferences, not demographics alone, complicating projections for senior housing expansion.

🏭 Industrial

Drone disruption: Iranian drone strikes damaged three Amazon data centers, disrupting operations and highlighting rising geopolitical risks to critical digital infrastructure.
Defense demand: Aerospace and defense tenants are driving leasing demand across Los Angeles’ South Bay and Long Beach industrial markets as federal spending boosts sector expansion.
Vegas logistics: EBS Realty Partners is leveraging its Southern California tenant relationships to anchor a new Las Vegas logistics project targeting regional distribution demand.
Campus conversion: Amazon purchased a Northern Virginia college campus in the nation’s largest data center market, signaling continued hyperscaler expansion in digital infrastructure.

🏬 RETAIL

Space purchase: Second Horizon Capital acquired a 710K SF shopping mall on Florida’s Space Coast, expanding its retail portfolio with a large regional center.
Madison sale: Jeff Sutton and SL Green sold 690 Madison Avenue to Richemont, marking another high-profile luxury retail deal along Manhattan’s Madison Avenue corridor.
Texas pickup: CTO Realty Growth acquired a South Texas retail property for $82M, adding another open-air shopping center to its national retail portfolio.
Deal streak: Sunoco is continuing its acquisition streak by purchasing additional New York properties, expanding its fuel retail real estate footprint.

🏢 OFFICE

Coworking consolidation: New State Capital Partners acquired United Franchise Group’s coworking brands Venture X, Office Evolution, and Intelligent Office, expanding its flexible office platform.
Legal expansion: Law firms drove record office leasing demand as firms renewed existing space while upgrading to higher-quality buildings.
DC lease: CHG Healthcare signed a Washington, D.C., office lease near the White House, securing new space for its expanding operations.

🏨 HOSPITALITY

Olympic surge: Milan hotels are setting record rates ahead of the 2026 Winter Olympics as surging visitor demand pushes pricing to historic highs.
Land proposal: United Parks CEO Marc Swanson said the company has received a land purchase offer that could affect acreage surrounding SeaWorld and Busch Gardens properties.
Hotel window: Hotel fundamentals remain soft, but pricing resets and limited new supply are creating an investment window for buyers targeting discounted hospitality assets.

📈 CHART OF THE DAY

CRE Trivia (Answer)🧠

It stands in Centennial Park in Nashville, TN, where the full-scale replica has become one of the city’s most recognizable and unexpected landmarks.