What we're seeing on the ground: 3 trends every multifamily Investor should know

As we move through the second half of 2025, the multifamily landscape continues to evolve. From shifting renter behavior to sharper competition among operators, this is a market that demands real time awareness.

At Lone Star Capital, we're actively managing a portfolio across Texas while working daily with our property teams, brokers, lenders, and investors. That gives us a unique window into what’s actually happening on the ground right now, not just in headlines or on investor decks.

Here are three key trends we’re watching closely:

1. Rent growth is more targeted and smarter

Broad based rent increases aren’t flying anymore. What we’re seeing now is more tactical: rent growth is happening, but only in unit types or locations where demand clearly supports it.

In several of our assets, we’ve implemented unit specific rent bumps for floor plans with strong occupancy, while holding steady or even offering small incentives on slower moving units. It’s less about “pushing rents” and more about optimizing occupancy while protecting NOI and cash flow.

This kind of fine tuned management is becoming a real differentiator in performance.

2. Leasing concessions are still here, but they’re strategic and submarket specific

Yes, concessions are still being used, but not necessarily as a sign of distress. Rather, they’re a short term lever to capture long term gains.

Unlike past cycles where concessions were applied broadly across portfolios, today’s incentives are highly submarket specific. In one submarket, a month free may be the baseline just to stay competitive; in another, we don’t need to offer any concessions at all due to strong demand and limited new supply.

We’ve seen great results offering up to a month free on select units, typically in high-turnover pockets or during slower leasing periods to boost occupancy and stabilize faster. The key is precision: reviewing comps weekly (in some cases daily), adjusting by floor plan, and setting tight expiration timelines to avoid lingering impacts on collections.

Blanket concessions are gone. Smart tactical concessions are in.

3. Buyers are coming back… and the competition is real

After a quiet start to 2025, we’re now seeing real movement in the market. Buyer activity across Texas, especially in Houston, is increasing. For the first half of the year, we didn’t close on any acquisitions.

There’s strong competition for high-quality, well-located assets. We’re seeing more groups actively pursuing deals, and capital is clearly returning to the market.

While we’ve lost out on a few deals to all-cash buyers or groups with discretionary capital that can move fast, we’re also winning deals because of our reputation, track record, and ability to close. Sellers value certainty, and we’ve been chosen over higher offers because they trust we’ll execute cleanly and professionally.

At the same time, we’re staying disciplined. We won’t compromise on due diligence or take shortcuts just to get a deal done. Our investors know we’re focused on long-term performance, not just short-term wins.

Pricing hasn’t returned to 2021 levels, but for the right assets in strong submarkets, values remain firm. We believe this is a smart time to be active and selective, and we’re excited to be back in acquisition mode.

In a market like this, active, hands on management matters more than ever. We're not just sitting back and hoping trends swing in our favor. We’re on the ground, adjusting strategies, pushing where it makes sense, and protecting where it doesn't.

For passive investors, now is a good time to ask:

· Is your sponsor staying active in the field?

· Are they adjusting to market realities or not reacting at all?

· Are they finding ways to create value even in a slower market?

We believe investors who partner with operators that focus on execution, not just exposure, will come out ahead in this environment. If you are interested in staying up to date with all things Lone Star Capital, fill out this form to join our investor list.

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