Multifamily housing investors often revisit a phrase to describe their long-term bullishness for the market: “You can’t live on the internet.” As an essential good, multifamily has proven to be exceedingly resilient through recessions, energy crises, geopolitical crises and constantly changing demographics.
Thus, multifamily remains a sound commercial real estate investment and a favored asset class among lenders and investors.
Still, multifamily housing isn’t immune to what happens beyond property lines. In 2026, that reality is more acute. Global conflict, volatile energy markets, a potential recession, and the debt maturity wall are converging to shape both risks and opportunities within multifamily housing.
Markets react nervously to unpredictable conditions. Therefore, investors face an essential need to understand how these interconnected forces could impact demand, absorption, rents and buying opportunities.
The 2026 debt maturity wall
A lot of CRE loan value comes due in 2026. According to the Mortgage Bankers Association, $875 billion in commercial mortgages is scheduled to mature this year, potentially prodding lendees into a difficult choice. Should they refinance, likely at significantly higher rates, or sell properties if they don’t have the cash flow to pay off loans?
Many investors took loans when interest rates were historically low. Given the sharp rise in rates since 2022, these borrowers face difficulty refinancing at affordable terms. Higher interest payments will reduce liquidity, further squeezing multifamily operators who might be dealing with vacancies, declining rents or rising costs.
But where borrowers face increased risk, buyers could find opportunity. Outside of overbuilt regional markets, multifamily buying opportunities have been scarce, particularly regarding distressed properties. This opens opportunities for buyers with access to capital, which the Mortgage Bankers Association says will be ample, perhaps prompting an 18 percent increase in loan origination rates over last year.
Properties won’t be affected equally, but distressed sellers might be more motivated, which could lead to available product below market value. Smart investors with risk tolerance should target discounts, especially in markets with weaker fundamentals or regarding poorly managed properties.
The impact of global instability on capital flows
War and geopolitical tensions produce anxiety across economies. In March 2026, following the start of the Iran War, the Dow Jones Industrial Average rose or fell by at least 0.8 percent on 11 trading days. Instability affects multifamily in several ways.
Directly, conflict disrupts global capital flows, as institutional investors tend to retreat from uncertainty to perceived safe havens. Multifamily often is one of those havens, a defensive asset class because demand is need-based.
Of course, the picture becomes more nuanced when considering international investors, whose role in U.S. multifamily acquisitions is increasing and who may pause investment due to risk at home. If that happens, liquidity in major markets is reduced, putting downward pressure on valuations.
Within the multifamily market, geopolitical tensions often have economic impacts. According to Multi-Housing News, a prolonged war will have more severe consequences, as renters confront rising costs. Chief among them: energy.
How energy prices affect multifamily
When global instability leads to energy crises, even short-term, the entire world feels the strain. The multifamily sector isn’t immune.
Higher fuel prices directly affect tenant budgets, potentially creating a ceiling for rent growth even in otherwise strong markets. Higher prices increase construction costs, which could lead to project adjustments, delays or cancellations. They also raise property costs for utilities, heating and maintenance. Some markets prohibit operators from passing these costs to renters, prompting further tightening.
Rising energy costs also bring inflation to the forefront. Multifamily long has been viewed as an inflation hedge because it’s non-discretionary (again, you can’t live on the internet). When wages rise correspondingly, rent growth often follows.
However, inflation erodes real income for renters, which could lead to higher unit turnover and resistance to rent increases. These typically are short-term issues that operators confront during economic cycles. Prepared investors position themselves best for such fluctuations.
What about recession?
Historically, multifamily housing has been more resilient than other asset classes in economic downturns. However, not all properties perform equally during recessionary periods.
For instance, Class A properties, particularly those in cities, might incur rising vacancies if renters seek more budget-friendly apartments. Meanwhile, Class B properties likely will be more stable, retaining existing renters while capturing new demand from those priced out of higher-end units.
According to JP Morgan, regional markets facing oversupply are more susceptible to recessionary conditions than those where demand remains strong. Operators in undersupplied locations have more leverage with vacancy rates and rents. Still, economists suggest watching behavioral shifts that arise from negative employment data. Rising unemployment could prompt challenges such as rent delinquencies and evictions.
If a recession hits, forward-looking investors will capitalize by helping to start the next multifamily upturn. As construction lags, oversupply corrects, setting the stage for unit and rent growth during recovery.
Winning in multifamily during unstable periods
The multifamily sector is an elastic marvel. The pandemic-era growth stage unfolded into a static, even slumping, period of oversupply and leveling rents. Now, it faces this new set of obstacles threatening short-term growth. According to the National Association of Home Builders, multifamily vacancies are expected to rise in 2026, creating fresh challenges for investors and operators.
However, market veterans have experienced economic shocks and global disruption before. They understand that winners in this environment will be those who are agile and can adapt to price increases and employment disruptions. They prioritize operational efficiency and select buying opportunities. They also anticipate the second- and third-line effects of a changing world.
Multifamily housing is not insulated from global events. It reflects them. Operators who understand that reality will be better equipped to handle those occasional shocks.
Michael H. Zaransky is the founder and managing principal of MZ Capital Partners in Northbrook, Illinois.
