Value-Add Still Adds Up: Higher priced capital makes renovating and flipping multifamily projects more complex, but value-add transactions are still thriving in some markets.

The article focuses on the current state of value-add transactions in the multifamily housing market amid rising capital costs and shifting financing dynamics. Despite higher interest rates and slower rent growth, value-add deals remain active, particularly in supply-constrained regions like the Midwest and Northeast, where older properties offer renovation opportunities focused on infrastructure improvements rather than cosmetic upgrades. Developers and investors are increasingly utilizing alternative financing methods, including seller financing, cash acquisitions, and private credit, while emphasizing careful underwriting and interest rate risk management. Market participants note that value-add strategies continue to hold appeal by acquiring properties at favorable prices and improving operational efficiency, even as the market adjusts to new economic conditions.