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The Monthly Multiple — March 2022

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Quick Stats:

  • Industry experts anticipate annual NOI growth of 15.1% for apartments in 2022
  • U.S. self-storage is now a $40B industry
  • EquityMultiple investors with 10+ investments have outperformed those with five or fewer by 176 BPS, on average*

The Moment Demands Diversification

Against a backdrop of geopolitical turmoil, sustained inflation, and uncertain monetary policy, tangible investments and tangible cash flows come into greater focus. As KKR put it in a recent Global Macro Trends report, “we strongly advocate for macro professionals and asset allocators to prioritize inflation protection and pricing power by overweighting collateral-based cash flows, including Infrastructure, Asset-Based Finance, and Real Estate.” Collateral-based cash flows…. Sound familiar? Per a recent study from GreenStreet advisors, 2021 is off to a slower start than anticipated in terms of transaction volume, but fundamentals remain strong for private commercial real estate. GreenStreet expects strong growth from core and some niche CRE asset classes, including expected annual NOI growth of 15.1% for apartments, 15.5% for self-storage, and 7.2% for industrial. Recent research from the EquityMultiple team on these sectors:

  • Apartments: We analyzed the recent performance of three of the top publicly traded multifamily REITs to see how their dividends stack up against comparable EquityMultiple investments. The result? EquityMultiple’s offerings outperformed all three public multifamily REITs.
  • Self-Storage: The U.S. self-storage industry has blossomed into a $40B industry, with approximately 50 thousand facilities and 1.9B rentable square feet.¹ The bottom line: Americans have lots of stuff, and move a lot, during good times and bad. Perhaps unsurprisingly, the self-storage sector continues to perform well through business cycles, and has acquired a reputation for resilience even during downturns.
  • Industrial: As Charles Kurz, Associate Director of Investments, discussed in our recent Investor Relations webinar, 2021 was a record-setting year for the industrial market. Strong U.S. industrial market fundamentals led to historic performance levels across all major metrics, including sales volume, pre-leasing activity, properties under construction, and vacancy rates.*

CRE market fundamentals have improved steadily over the past two years. Still, global macro uncertainty has increased in the first quarter of 2022, once again driving home the need for both diversified, non-public market correlated cash flows, as well as opportunities for inflation-hedged price appreciation. EquityMultiple’s performance data bears this out. In a study of our investor portfolios, diversification pays off, both in terms of yield and in terms of compound net returns.

Analysis of all EquityMultiple investor portfolios, as of 3/31/22, reveals…

  • Investors with 10+ investments have realized a net 17.4% IRR on across all exited investments*, compared with a 15.64% net IRR for those investors with five or fewer investments*.
  • The coefficient of variance for those figures is 0.62 for portfolios with 10+ investments, versus 1.08 for those with five or fewer investments. In other words, among EquityMultiple portfolios, those with more investments tend to evince significantly less variance in terms of realized IRR.

A more detailed case study on the performance of investor portfolios by diversification level is forthcoming.


No one needs a new acronym to remember. But for any forward-looking real estate investor, this one may be worth keeping tabs on. REaaS, or “real estate as a service,” is the general strategy of using data, flexible leasing models, and dynamic design to create better tenant experiences and, ultimately, improve NOI. The REaaS philosophy is relevant across sectors, but particularly relevant for multifamily and office assets as hybrid workplaces and “work from home” become more prevalent.

Per a survey of CRE industry professionals by Deloitte, many CRE firms are focusing on retrofitting properties and repurposing spaces for alternate uses to maximize value. However, only one quarter of respondents say their companies are substantially increasing technology investments to bolster portfolio and asset management capabilities. EquityMultiple is focused on working with these more technology-enabled sponsors and operators.

Further Reading

Deloitte — Deloitte Insights CRE Outlook
KKR — Macro Insights — State of Play
Wall Street Journal — Unemployment nears pre-pandemic levels with strong March jobs report

*Sources: Deloitte, KKR, GreenStreet Real Estate Analytics, The SquareFoot Storage Beat

“Elevated costs will have an effect at the margin, weighing on construction starts now — and, therefore, limiting potential future supply growth — even if occupier demand and rents start to grow more rapidly.”

*Past performance is no guarantee of future results. Aggregate return figures for these investor cohorts were derived by first calculating the dollar-weighted average return of each investor’s portfolio across all fully realized EquityMultiple investments as of 3/21/22, then calculating the mean, standard deviation, and coefficient of variance for each cohort.

Originally published at https://www.equitymultiple.com on April 6, 2022.




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A platform built for modern investors. Access institutional-grade commercial real estate deals at low minimums, and build a smarter, more diversified portfolio.

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