The Multifamily Market Is Becoming a Stock-Picker’s Game

The multifamily market that rewarded nearly everyone during the 2021–2023 run is giving way to something more demanding. Rent growth has moderated, refinancing pressure is creating forced sellers, and institutional investors are scrutinizing operating partners with a level of rigor that the boom years rarely required. Cortland, one of the largest vertically integrated apartment operators in the country, sees the current environment not as a headwind but as the moment its model was built for.

Chief Investment Officer Mike Altman discusses where the market is heading, where capital is still flowing, and why operational visibility is becoming the defining competitive advantage in multifamily investing.

CM: The next phase of multifamily has been described as a stock-picker’s market rather than a rising tide story. What does that shift look like on the ground — and when did you start to see it?

MA: We’d resist the “stock-picker” label, at least in the literal sense. Real estate isn’t a security you can mark to market and exit on short notice and underwriting it as though it behaved like one has quietly distorted a lot of business plans over the past several years. Plenty of owners built three-to-five-year hold models on an assumption of liquidity that this asset class simply doesn’t offer, and when the market didn’t cooperate, those holds got stretched well past what their capital stacks were built to absorb. We believe that mismatch, not weak fundamentals, explains much of the distress playing out today.

Where the framing does hold up is in how much submarket selection now matters. We started seeing that concretely in the back half of 2025, once the 2023-2025 Sunbelt supply wave began clearing through lease-up. It shows up market by market across our 230-plus communities: Boise, Fort Collins, and Houston are pulling ahead on demand, while Austin and Phoenix are still absorbing supply-driven softness. Being in the right region isn’t enough anymore — winning now takes submarket-level discipline backed by real-time data.

CM: What are institutional investors asking you most often right now when they evaluate an operating partner?

MA: Investors have been through enough cycles to know which levers don’t hold up on their own — cheap debt, cap-rate compression, short holds engineered for a quick mark all had their moment, and none of them proved durable. So, the diligence question has narrowed considerably: can this partner generate net operating income growth that’s real, not a pro forma assumption, and not dependent on where rates or spreads happen to sit? That kind of growth only comes from a platform — a disciplined approach to revenue and expenses, quarter after quarter, built on people and systems rather than a market tailwind. That’s the capability being underwritten right now, and it’s the one that survives a full cycle rather than just a good year.

CM: Where do you see the clearest disconnect between market sentiment and actual opportunity?

MA: We believe the clearest disconnect is in markets the headlines have already written off because of supply. The broad narrative says “oversupplied Sunbelt market, stay away,” but at the submarket level, some of the best basis we’ve seen in years sits inside those same metros — assets trading meaningfully replacement cost, often next to platform assets where we already have operating leverage.

Sentiment tends to trail the data by roughly two quarters, and the only way to close that gap is scale of insight — watching every submarket in real time instead of relying on a lagging, market-level headline. By the time a market’s reputation catches up to its fundamentals, the discount is usually gone. That lag is exactly where a disciplined, data-driven buyer creates value.

CM: Where is capital still flowing in 2H 2026?

MA: Capital is still flowing, but selectively. We’re seeing renewed institutional appetite for well-located Sunbelt assets priced below replacement cost, workforce and value-add housing in great locations with a credible story, and structured situations tied to the wall of loan maturities coming due this year and next.

Affordability dynamics are doing real work here too — renting is pricing out ahead of owning by a wider margin than we’ve seen in a long stretch, largely because apartment rents can adjust to supply and demand within a lease cycle, while for-sale housing stays anchored by locked-in mortgage rates and a thin resale pipeline.

Preferred equity and rescue capital are particularly active as sponsors without deep operating platforms look for partners to solve balance sheet problems they can’t stabilize alone. Pure core, fully-priced stabilized deals are trading, but the real competition for capital is in situations where operational execution, not financial engineering, creates the return.

CM: What kinds of assets are attracting attention now—core, core-plus, value-add or distressed situations with operational upside?

MA: Honestly, the market feels a little manic right now, and counterintuitively, we believe that’s created opportunity across the entire spectrum rather than in one obvious lane. It’s a bit like walking through a minefield: core, core-plus, value-add, distressed situations — good deals are sitting in all of them, but you genuinely don’t know which one you’re going to step on until you’ve done the work.

That’s different from a few years ago, when the opportunity set was easier to define and you could point to a single strategy and say that’s where the returns are. Today, the dispersion within each category is as wide as the dispersion between categories — a distressed asset can be a great deal or a capital-structure trapped by obsolete product or a submarket in decline, and a core-plus deal can look safe and still be overpriced. The result is we’re sorting through far more deals than we used to, submarket by submarket and asset by asset, because the label on a deal tells you a lot less than it used to about whether it’s actually a good one.

CM: What operating metrics do you monitor most closely today that perhaps received less attention during the low-rate environment?

MA: Ultimately, every metric we watch rolls up to one question: is this driving real NOI growth, or is it borrowed performance that shows up as a cost later? During the low-rate years, a lot of underwriting leaned on top-line rent growth assumptions and didn’t have to look much further. That’s not true anymore.

We’re watching controllable operating expenses line by line — payroll, insurance, repairs and maintenance — because expense discipline, not rent growth, has been the primary driver of NOI outperformance across our portfolio over the past two years. We’re also far more focused on renewal spreads versus new lease trade-outs, bad debt and collections, and lease-up velocity relative to concessions, because those metrics tell you whether performance is coming from real demand or from give-backs that show up later.

And we’re applying real statistical scrutiny to third-party rent growth forecasts across our markets rather than taking vendor projections at face value — the variance between forecasters has been wide enough that blind reliance on any single source is a real risk.

CM: What do you expect will define success for multifamily investors over the next several years?

MA: We think about this as a cycle, not a checklist — capital raising, acquisitions, and operations aren’t separate skills, they reinforce each other continuously, and scale is what keeps that cycle turning.

Efficient property operations drive NOI growth. NOI growth supports a genuine top-line premium and a stronger resident experience. We believe that combination earns greater investor demand and easier fundraising, which strengthens corporate EBITDA and improves cost of capital, and a better cost of capital funds the next round of operational investment — more resources, better systems, more people, which starts the cycle over again.

No portion of this cycle creates measurable success on its own. A manager can have great fundraising ability but weak operations will eventually deplete the NOI needed to fund it. On the other hand, a manager can have excellent operations but still lack capital access needed to grow the platform enough to seize the opportunity. Over the next several years, the firms that pull ahead will be the ones that fully understand and manage that whole cycle deliberately – not just one component.

We also see success being defined by transparency. Transparency is a genuine priority for investors and they understandably want structured, consistent, asset level data that they can use. The more investors can partner with funds that can provide a level of information that lets them aggregate across their portfolio, the better the insights they can action off of.