In the first quarter of 2025, a CBRE survey recorded improving sentiment among investment professionals evaluating multifamily assets. That finding is useful as a historical snapshot of underwriting attitudes at that moment. It is not a current reading of California's multifamily market, and it should not be used by itself to support a purchase, sale, refinancing, or operating decision today.
This distinction matters because sentiment, cap rates, financing terms, rents, vacancies, and transaction conditions can change at different speeds. A dated report can show what market participants believed and assumed during a specific quarter. A current property decision requires current evidence for the subject asset and its competitive market.
What the Q1 2025 CBRE survey reported
CBRE's report was based on estimates and the expert opinions of its local investment professionals. For core multifamily assets, it reported that positive buyer sentiment increased to 65% in Q1 2025 from 44% in Q4 2024. It also reported that 67% of core-asset sellers were neutral, compared with 57% in the prior quarter. The report described more limited improvement for value-add participants and said the shift varied by market and asset type.
The same survey reported an average going-in capitalization rate of 4.83% for core assets, down six basis points during the quarter, and an average exit capitalization rate of 5.00%, down three basis points. CBRE also reported that its three-year asking-rent-growth assumptions held at 2.7% for core assets and 3.1% for value-add assets. These were survey-period underwriting assumptions across the markets CBRE tracked. They were not promises of actual rent growth or property performance.
What the report did not establish
The survey did not establish that every California market was improving, that values would rise, or that a particular acquisition would perform well. It also did not turn a national or multi-market sentiment reading into a property-level forecast. Even within the report, core and value-add assumptions moved differently. That is a reminder to separate broad narrative from the facts of a specific deal.
Owners reviewing a multifamily asset should avoid carrying the Q1 2025 percentages forward as though they describe today's pricing. Freddie Mac Multifamily maintains a research library of dated outlooks, market reports, and analyses. That library is useful for locating a report with a named publication date and period, but the date and methodology should travel with every market claim.
How to update the analysis for a current decision
1. Rebuild the market set
Define the property's actual competitive area and collect current asking rents, concessions, vacancies, deliveries, absorption, and comparable sales from appropriate sources. A statewide label can hide significant differences between neighborhoods, property classes, unit mixes, and operating conditions.
2. Separate property operations from market assumptions
Review the rent roll, collections, leases, vacancy, maintenance backlog, turnover activity, insurance, taxes, utilities, payroll, contracts, and near-term capital needs. Coastline's multifamily property management framework connects those daily operating facts to a property-level plan. Market optimism cannot correct incomplete records or unresolved asset issues.
3. Test the underwriting
Model more than one case for rent growth, vacancy, expenses, capital work, and financing. Explain which inputs come from current evidence and which remain assumptions. A cap rate is one valuation input; it does not capture every difference in condition, lease exposure, capital requirements, or risk.
4. Name the decision horizon
An owner considering a near-term refinance needs different evidence than an owner evaluating a long hold, renovation plan, or sale. Connect the analysis to the decision, the timing, and the owner's risk tolerance. Coastline's operating model begins with current facts, priorities, decision rights, and unresolved work.
A disciplined way to use historical research
Historical reports are most valuable when their boundaries stay visible. Record the publication date, period, geography, asset type, methodology, and exact metric. Then compare that snapshot with a current report using like-for-like definitions. If the data cannot be updated, label the fact as historical and avoid converting it into a recommendation.
For owners who need a property-specific operating baseline, a property management review can help identify current records, open decisions, and the work that still lacks a clear next action.
Primary sources
- CBRE Research: Multifamily Buyer and Seller Sentiment Improves in Q1
- Freddie Mac Multifamily Research
Contact Coastline Equity to discuss the current operating picture for your multifamily property.
This article is educational and presents a clearly dated Q1 2025 research snapshot. It is not current market, investment, valuation, tax, legal, or financing advice. Verify current property and market data with qualified professionals before acting.
