For accredited investors seeking predictable returns, tax efficiency, and long-term wealth creation, multifamily real estate has remained the most resilient and compelling asset class in the United States. Even with evolving market conditions, shifting interest rates, and broader economic uncertainty, multifamily continues to outperform other asset classes across nearly all macro indicators.
In this article, we will break down why multifamily real estate is uniquely positioned for strong performance in 2026, and how accredited investors can capitalize on the demand for rental housing in America’s fastest-growing secondary markets.
America’s Housing Demand Is Outpacing Supply — and Multifamily Sits at the Center of It
Across the country, the U.S. continues to experience a structural housing shortage. According to recent housing reports, the nation remains 3.8 million housing units short of current demand. For investors, this imbalance creates a powerful tailwind: People need places to live, and multifamily buildings deliver housing at scale.
Even as homeownership becomes more expensive due to interest rate volatility, renters continue to fuel stable occupancy:
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Class B and workforce housing remain at 95–97% occupancy nationwide
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New supply is concentrated in only a handful of major metros
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Most secondary markets have a significant shortage of quality rental units
This persistent demand is one of the core reasons multifamily remains stronger than office, retail, hotels, or industrial assets. Shelter is non-discretionary. People will continue renting regardless of broader economic shifts.
Multifamily Historically Outperforms During Uncertainty
While other real estate sectors are cyclical, multifamily has demonstrated remarkable consistency during recessionary environments.
During the last three major downturns:
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Multifamily out-performed office and retail by 20–30%
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Rent collections remained above 92%, even during the 2020 pandemic
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Occupancy among stabilized properties stayed exceptionally high
Why does multifamily hold up so well?
Because in periods of economic tightening, more people rent rather than buy. High mortgage rates, tighter lending criteria, and affordability challenges push first-time buyers into rental housing longer than expected.
Even investors who previously focused on single-family rental portfolios have shifted to multifamily because of:
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Greater stability
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Economies of scale
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Lower unit-by-unit maintenance
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Professionalized management
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A healthier risk-to-reward profile
For accredited investors looking for consistent performance, multifamily remains the most recession-resistant real estate category.
Strong Cash Flow and Forced Appreciation Create Two Revenue Streams
Unlike many other investments, multifamily produces two distinct types of returns:
1. Cash Flow: Monthly or quarterly distributions generated by rent payments, tenant fees, ancillary income (parking, storage, pets, utilities pass-throughs, etc.)
2. Forced Appreciation: Value is increased not by speculation, but by improving operations: renovating units, rebranding, increasing occupancy, upgrading amenities, improving management efficiency, optimizing expenses.
This combination makes multifamily one of the few asset classes where investors can actively influence value, rather than relying on market speculation.
At Amethys Projects, we target properties where operational improvements or renovations can meaningfully increase Net Operating Income (NOI). Every $1 increase in NOI creates approximately $16–$20 of property value in many secondary markets — a powerful amplification effect.
Why Secondary Markets Offer Some of the Best Opportunities in 2025
Primary markets like Los Angeles, New York, or San Francisco are saturated, expensive, and often offer lower cap rates. Meanwhile, secondary markets in the Western United States present an attractive combination of:
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Job and population growth
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Inflow of businesses
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Affordable housing pressure
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Limited competition
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Less development pipeline
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Higher yields
These markets include cities where employers are expanding, rents are rising steadily, homeownership remains unaffordable, and supply is constrained due to zoning or regulatory hurdles.
Because demand outpaces new housing creation, these markets sustain rent growth and high occupancy — ideal for multifamily investor returns.
Amethys Projects focuses specifically on high-growth Western secondary markets where fundamentals remain strong and long-term appreciation is supported by population inflows, employer migration, and a constrained housing pipeline.
Tax Advantages Make Multifamily One of the Most Efficient Investments Available
Accredited investors often choose multifamily because of its unmatched tax benefits. These include:
**✓ Depreciation (including bonus depreciation)
✓ Cost segregation studies
✓ Pass-through deductions
✓ Ability to offset passive income
✓ 1031 exchange opportunities**
A $1 million investment in multifamily can often deliver significant tax-deferred value, depending on the structure of the deal and the investor’s tax profile.
For investors seeking to maximize after-tax cash flow and long-term wealth preservation, few assets come close to the efficiency of multifamily.
Preferred Returns Create Alignment and Protection
One of the most appealing structures for accredited investors is the preferred return, which ensures that investors receive a minimum return before the sponsor shares in profits.
Amethys Projects offers:
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8% preferred return
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Meaningful co-investment from our team
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Alignment built into the capital structure
This means investors receive priority distributions, and returns are not diluted by performance fees until the preferred threshold is met. This alignment is a key differentiator in an industry filled with sponsors who contribute minimal first-loss capital.
Why Multifamily Is Expected to Strengthen Even Further in 2025
Looking ahead, several macro factors support continued strong performance:
1. Mortgage rates remain elevated. This keeps more households renting.
2. Construction costs are high. This limits new supply and preserves value for existing properties.
3. Institutional demand remains strong. Multifamily properties remain a favorite among large funds and REITs.
4. Migration patterns support secondary market growth. The West and Southwest continue to attract workforce populations.
5. Inflationary environments favor real assets. Multifamily rents historically adjust in line with inflation.
For accredited investors, these factors combine to create a uniquely positive environment.
Conclusion
Multifamily real estate continues to outperform because it serves a fundamental human need, benefits from structural supply shortages, and provides both immediate income and long-term appreciation. In a world where volatility has become the norm, multifamily stands out as a stable, revenue-producing, tax-advantaged investment.
For accredited investors seeking strong cash flow, aligned structures, and proven operators in high-growth secondary markets, multifamily remains the clear choice for 2025 and beyond.
