Market Update: Q2 2022

Andrew Bieker

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Overview - Multifamily

At KPRS, we value providing real time data on the construction industry as a resource to our clients to help them build better and smarter. The KPRS Preconstruction Group provides estimates for roughly $3 Bn worth of work on any given year. Roughly a quarter of the work estimated comes from our multifamily group and encompasses market-rate, affordable, senior living, assisted living and hospitality assets.

The multifamily market has held consistent across the United States throughout the pandemic. Although most major urban areas saw an out migration during the peak of the pandemic, other secondary markets thrived as many companies moved to remote/hybrid work models. Since 2021, the multifamily market, especially in urban areas, has been recovering and stable. CBRE reports an optimistic multifamily outlook in the United States as we continue in 2022:

• 300,000 + units projected to be delivered in 2022
• + 95 % forecasted multifamily occupancy rate
• 8% projected growth in urban effective rents in 2022
• $223.18 Bn projected multifamily investment in 2022

Points of Interest

So how is all of this affecting the market?

• Return to urban markets
• Material costs rise through demand
• Increased investments into the multifamily assets

Urban Inward Migration

As urban market traffic returns and businesses report back-to-office plans, the demand for urban infill projects will rise. With increased emphasis on hybrid work models, we’ve seen and are expected to see the following:

• Higher interest in one and two-bedroom units to provide an office setting at home
• Proximity to the office remains a factor to most
• Vacancy rate expected to decrease pre-pandemic levels

Material Cost

As of May 2022, Assaf Nachshon, VP of Preconstruction, noted the following figures based on a current historical average assuming an average unit size of 800 RSF. Within the last three years, KPRS has seen an 8-10% increase in costs with jumps up to 20-25% within the last year where historically the average has been 3-5%. Although we have seen cost increases, rental rates have remained constant allowing for construction to continue and developments to remain profitable pursuits.

Increased Investments Into the Multifamily Assets

As cited from CBRE with data starting in 2008, this historical chart shows the progression of multifamily assets, with investments to set new records in 2021 and 2022.


Optimism around the multifamily market coupled with increasing home values is driving the multifamily market and continuing to make it stable investment for real estate investment firms. Escalation on material costs is a constant conversation within the KPRS team and we’ve implemented strategies to ensure projects remain on schedule and on budget. Give us a call to discuss further.


For more information on pricing for your next project, please contact:
Andrew Bieker, Business Development Manager
Cell: 1 (714) 351 - 0691 | Email: [email protected]


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