The Rent Roll with Jay Parsons EP#43 Zach Bowyer | Where Are Apartment & SFR Values?
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Jul 24, 2025 Zach Bowyer, Executive Managing Director at Cushman & Wakefield, shares his expertise in real estate valuation, focusing on apartments and single-family rentals. He discusses how interest rates and rental trends have impacted asset values and common misconceptions about valuation. The conversation also highlights surprising statistics from recent Census data on multifamily housing starts and the importance of understanding shelter costs in inflation dynamics. Bowyer gives insights into evolving strategies in the multifamily market amidst significant economic shifts.
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Use DCF Over Cap Rates
- Do not rely solely on direct cap rates; use discounted cash flow (DCF) for a fuller valuation.
- DCF is vital in unstable markets where rent growth and vacancies fluctuate.
Valuation Approaches Differ by Client
- Lender valuations generally stay within data-driven caps and comps, limiting assumptions on future rent or value jumps.
- Fund valuations allow more room for modeled cash flow assumptions and longer-term perspectives.
Apply Cap Rate Spreads in Underwriting
- When underwriting, apply a 50-75 basis point cap rate spread between acquisition and terminal periods.
- Avoid zero or flat spreads; assume higher risk on exit cap rates given the current market environment.
