The Rent Roll with Jay Parsons EP#50 Jim Costello | Multifamily Capital Markets Update
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Sep 11, 2025 Jim Costello, the Chief Economist at MSCI Real Assets, joins to share his expertise on the multifamily capital markets. He discusses the potential distress in the apartment sector and the significant lack of development capital. The conversation touches on the current influx of debt funds and strategic insights into the buy box for institutional capital. Additionally, the growing momentum of apartment sales transaction activity is explored, alongside recent headlines about a rent control proposal in Massachusetts.
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Airbnb Bans Don't Create Supply
- Banning short-term rentals in NYC removed units but did not increase long-term supply or lower rents.
- Policy fixes without adding housing supply often fail to improve affordability.
Cap Rate Drivers Beyond Rates
- Interest rates influence cap rates but are not the sole driver; liquidity and income growth also matter.
- Valuation requires viewing real estate across the full investment universe, not in isolation.
Values May Have Bottomed
- MSCI data shows multifamily values have ticked up, suggesting a possible bottom absent major shocks.
- Jim argues the post-COVID overshoot corrected back toward more normal pre-2020 levels.