Hello Friends and Investors,

The market is liquid with capital right now. Capital with options is growing more deliberate about how it deploys - and what it will pay for. Stabilized multifamily is trading, but at premiums that leave little room for error in a higher-for-longer rate environment. The deals worth pursuing are the ones with a story: a lender-driven situation, a recapitalization need, a motivated seller meeting market reality. In our markets, we are beginning to see that story emerge - selectively, but clearly. That is the environment where disciplined operators do their best work. And it is the moment this issue is written around. Happy 250th birthday to the United States of America - we are grateful for the freedoms and the country that make this work possible.

Capital Is Ready. Selectivity Is Rising. The Story Is the Edge.

There is no shortage of capital looking for multifamily. According to Colliers, $174 billion was raised on a two-year basis through March 2026 targeting U.S. multifamily alone. Global private equity dry powder reached approximately $3.7 trillion at the start of 2026, per Preqin - roughly double 2019 levels. The money is there. The question has shifted from availability to discipline.

What that capital is actually doing is more nuanced. Opportunistic and value-add strategies continue to capture the bulk of new flows, per CBRE, while core buyers remain selective. The Yardi Matrix National Multifamily Market Report from May 2026 put it plainly: deal volume for the first five months of 2026 clocked in at $26.6 billion, down 10.7% year-over-year, despite abundant capital. The bid-ask gap on stabilized assets remains the culprit - sellers holding for a price that current financing costs cannot support.

The rate backdrop is the stubborn variable. Warsh's first FOMC meeting as Fed Chair in June produced no cut, a unanimous 12-0 vote to hold at 3.5%-3.75%, and updated projections now pointing to a possible hike - the federal funds rate dot for year-end 2026 moved from 3.4% to 3.8%, with nine of 18 members signaling near-term tightening, per the Fed's June dot plot. MSCI's RCA CPPI for May 2026 reflects the consequence: apartment prices fell 1.5% year-over-year and declined 0.4% from April, sitting roughly 20% below the mid-2022 peak. The repricing is real, but uneven - and unevenness is where opportunity lives.

The debt maturity wall sharpens the picture. The Mortgage Bankers Association puts $875 billion in commercial and multifamily mortgage debt maturing in 2026. Much of it originated at 3%-4% coupons and now faces refinancing at meaningfully higher rates. As we noted to Commercial Observer in June, the real friction point is the spread between where maturing multifamily loans originated - as low as 5.1% - and the average 6.2% rate on current CRE debt. The 10-Year Treasury matters more to refinancing economics right now than the Fed funds rate. We have built our strategy around the assumption that meaningful rate relief is not coming in 2026 - which means underwriting conservatively on debt assumptions and prioritizing deals where in-place cash flow can carry the asset without depending on a refinancing tailwind that may not materialize.

The distinction worth making is between operational distress and what might be called the math gap: a performing asset with a capital stack problem. True operational distress - declining occupancy, negative NOI growth - remains the rarer case. The more common situation is a solid building, collecting rents, with a debt service coverage ratio that no longer satisfies lender thresholds at refinance. That is not a broken asset. It is a motivated seller. And it rewards operators with underwriting discipline, lender relationships, and the patience to find the story behind the price.

Our Midwest markets continue to hold up well in this environment. The National Apartment Association projects regional rent growth of 3%-4.5% for 2026 - among the strongest nationally. Columbus posted 4.5% rent growth in Yardi Matrix BTR data for May 2026. The bifurcation between supply-disciplined Midwest metros and oversupplied Sun Belt markets is widening, and it continues to validate the geography we have built around.

The Deal With a Story

Across our region, the pattern is consistent: a lot of capital chasing a narrow set of deals, and the deals that actually trade are the ones with something driving them beyond a seller testing the market.

Stabilized, well-occupied multifamily is trading - but at premiums that, when stress-tested at current refinancing rates, do not meet our return threshold. We pass on a lot of those. What we are prioritizing are situations where a lender is pushing toward resolution, or where a borrower cannot clear a 2026 refinance at today's terms. Those conversations are surfacing. Not a flood - a discernible and growing trickle.

Vacancy is ticking up modestly across our markets relative to the tightest conditions of recent years, and rent growth, while still positive, has moderated. We are managing through peak leasing season with active leasing and selective concession use. The fundamentals remain sound. This environment just requires more work to generate the same result. The operators who do the work well are the ones who come out ahead.

Investing in Execution

This market does not reward good acquisitions alone. It rewards good acquisitions paired with excellent operations. We have always believed that - the current environment just makes it more true.

We have expanded our collaboration with Brendan Van Deventer, Co-Founder & Managing Partner of CRES, on the asset management side of our business. Brendan and the CRES team bring operational rigor and systems thinking that strengthens how we oversee performance across the portfolio - leasing velocity, expense management, value-add execution, and reporting.

The operators who come out of this cycle well are the ones who invest in infrastructure now, not after the fact. When we underwrite a deal, we are making a promise to our investors about what we can deliver. Keeping that promise consistently requires the best resources we can find. Bryan and I are proud of the team and partnerships we are building. The grind is real. So is the quality of the people doing it alongside us.

Peak leasing season is well underway. Across the portfolio, we are running active leasing campaigns, managing concession levels to balance occupancy and effective rents, and watching turnover timing carefully as the summer window moves.

We are working through a refinance on a two-property portfolio - a process that reflects the broader market: more lender conversations, more patience, and more structure work than a few years ago. We are navigating it methodically. In parallel, renovation and value-add business plans are active across the portfolio. Managing a capital program while keeping occupancy stable during peak season is not glamorous. It is the work that determines whether a business plan delivers what it promised.

Marcus & Millichap - 2Q 2026 Multifamily National Report

A thorough midyear read on national multifamily fundamentals. The framing - "Fundamentals Hold Firm Despite Headwinds, Keeping Investors Engaged but Selective" - captures the current posture well. Strong data on regional divergence, supply pipelines, and capital flows. Read the report

MSCI RCA CPPI - U.S. Commercial Property Price Index, May 2026

MSCI's repeat-sales index for May 2026 is the cleanest current read on where commercial property prices actually are. Apartment prices down 1.5% year-over-year and roughly 20% below the mid-2022 peak. Non-major metros are holding up meaningfully better than the six major gateway cities - essential context for any acquisition conversation right now. Read the report

The Legacy Life
by David Green

Green's argument is that a meaningful life is built through intentional investment in people, relationships, and purpose - not just financial return. Reading it during a demanding operational cycle is a useful reminder that the infrastructure we are building at CF Capital - the team, the partnerships, the LP relationships - is the legacy work. The deals are the output. The people are the asset.

 ""It's not supposed to be easy. Anyone who finds it easy is stupid."

—  Charlie Munger

Most of the long-term capital partnerships we've built started with a single conversation - often before there was any deal on the table, and often years before any check was written. The relationships compound. The deals follow. If something in this letter resonated, or if now feels like the right time to start a conversation, we'd welcome it.

Schedule a call with Tyler: Lets Talk!

In Partnership,

CF Capital