REAL ESTATE NEWS

Fresno, California multifamily investors are showing resilience, even at a time when the cost of capital remains high, with geopolitical uncertainty remaining a factor.

At the end of June, the 12-month trailing sales volume hit $248.7 million, according to a market report from Colliers. This is more than $100 million above the historical average of $143.2 million. Cap rates averaged 40 basis points more on closed transactions in the second quarter compared with the 6.2 percent rate seen in 2025.

The top notable multifamily sale by dollar volume listed in the report in Fresno involved 18-unit Hampton Way Apartments, which traded for $3.66 million. Rounding out the top three were properties 1426 Church Street and 1275 N. 8th Street, which sold for $2.20 million and $2.10 million, respectively.

"Fresno saw large assets, come to market and trade this quarter, a segment that had been quiet for much of the past two years and a signal that institutional-grade capital is re-engaging with the Central Valley," Colliers said in the report.

"We're also seeing growing opportunity in tertiary markets, where pricing and returns are drawing buyers priced out of or unsatisfied with yields in the core Fresno-Clovismarket."

Some other fundamentals in the market, meanwhile, softened — but look stable. For example, net absorption fell from 363 units in the second quarter of 2025 to 49 units — but the number remains positive and was in line with the 54 units of deliveries in Q2 2026.

Vacancy ticked up by a modest 10 basis points year-over-year to 4.7 and annual rent growth slowed to 1.59 percent to $1,499 per unit. It's a market that's steady rather than flourishing.

But the market is not without its challenges. Colliers noted to keep an eye on the 10-year Treasury, which has continued to spike due to the escalation in the Middle East. Elevated borrowing could put pressure on deal-making and underwriting.

This leads to the other issue: the maturity wall, with about $162 billion of the $875 billion in national commercial mortgages coming from the apartment sector set to mature this year, according to Colliers, citing data from the Mortgage Bankers Association. Between 2021 and 2022, $500 million in trades took place across Fresno's multifamily sector, with cap rates around 5 percent, per Colliers' tracking.

"While lenders are actively quoting, borrowers are refinancing into materially higher rates and lower proceeds, often requiring a cash-in paydown to satisfy
today's debt service coverage requirements," Colliers warned.

Going forward, CoStar expects that occupancy will remain stable through 2026 — with rent growth slowing even more to 1 percent annually and the sales volume momentum continuing.

Source: GlobeSt/ALM