5 Strategic moves to protect NOI in 2025’s multifamily squeeze

In partnership with Bisnow, TheGuarantors recently convened a group of multifamily industry leaders for a webinar titled "Spring 2025 Multifamily Outlook: Trends Shaping the Rest of the Year." Moderated by Aaron Victorson, EVP of Sales & Revenue Operations at TheGuarantors, the panel featured a powerhouse lineup of multifamily experts.

This whitepaper distills that conversation into a guide on how to thrive in 2025 and beyond given the year’s trends and challenges—elevated supply, slower lease-up stabilization, changing renter demographics, rising costs, renter fraud, and more.

Meet the panel

The state of supply, demand, and rent growth

The multifamily sector is emerging from a record supply surge, with ~600,000 new units delivered in 2024 and another half million projected to deliver this year, but this wave isn’t being felt evenly. Sharon Wilson Géno, President of NMHC, opened up the discussion with a state of the market: “We saw historic deliveries coming out of the end of 2024 and still projected for the first part of 2025, but not pervasive—it’s concentrated.” There are many reasons for that, including the end of a historic low interest rate environment and coming out of the COVID hangover. “I think we forget that it took us three years to get into COVID. It’s going to take us three years plus to get out. Projects were delayed, there were supply chain problems, deliveries got delayed and now we’re seeing them come on to the market.” Though national numbers may indicate otherwise, Sharon cited markets like Phoenix, Nashville, and Austin as high supply areas, but stressed that absorption remains strong overall, even in overbuilt areas. "We’re still seeing absorption at historic norms," she added, attributing it to elevated household formation and the continued affordability gap between renting and homeownership.

Brett Gelsomino, SVP of NRP Group, described the climate as a "two-to-three-year lagging delivery wave" that is creating a race for occupancy in some markets. However, he framed the longer-term picture as favorable, pointing out that “in many of our markets, specifically Sunbelt markets, migration and demand is still very healthy. We are bullish in the long run that these markets will remain healthy. They have strong housing fundamentals." With increased costs, high interest rates, natural disaster risk, and expensive land, homeownership is as unaffordable as it’s been in many markets, making renting a very attractive form of housing.

Greg Curci of Morgan Properties offered a ground-level view: "Our southern state properties are 93-93.5% occupied on any given day. [For] the last year, rent growth has been flat.” The rest of Morgan Properties’ portfolio, however, is 95% occupied and seeing pretty strong rent growth, particularly in the Midwest, mid-Atlantic, and the Northeast.

The panel agreed that current conditions illustrate a tale of two markets—business as usual in certain parts of the country and then areas where it feels like an 18-month blip of oversupply. Regardless, overall sentiment expressed reinforced that the multifamily market is resilient and fundamentals for rental demand remain strong. Greg Curci highlighted the industry’s resilience by noting that “it can take a record level of supply and on a bad day, you’re 93% occupied. Owners of office buildings wish they had that problem.”

People power: Staffing for scale and retention

While overall absorption remains high, there’s a lot of staffing and training work that goes into making the numbers happen. During the current glut of supply in select markets, substantial planning goes into being prepared for a significant amount of work for those regions for a limited period of time. Lesa LaRocca, Division President at Avenue5 Residential, emphasized that effective staffing must start ahead of the curve to be prepared. In markets like Austin, Avenue5 is recruiting even when there are no current openings because it is essential to fill onsite positions with people that are high quality, experienced, and match both the asset and its clients. "We know the value of a great team on site. It’s the gold.” Lesa and team introduced a program called ‘Coffee Connect’ that allows staff and jobseekers to meet in one location for resume reviews and quick, conversational interviews.

In addition, Avenue5’s onboarding model includes a five-week training cycle and a unique mentorship program which pairs new hires with experienced team members around the country for daily support. Programs such as these are creative ways to strengthen the talent pipeline and foster consistency and performance across properties.

Aaron Victorson, EVP of Sales and Revenue Operations at TheGuarantors, highlighted the value of using AI-powered training tools like Gong and Attention, which help teams self-evaluate and share best practices. This approach not only builds capability but also drives consistency and faster ramp times.

Panelists also discussed how roles are evolving. With more centralized operations and higher expectations, property staff are expected to do more with less. Supporting them with clear systems, effective onboarding and mentorship programs, and regular feedback is essential in 2025.

Lease-ups require smarter execution

Lease-up velocity has changed. Rather than the typical 12 months for a lease-up to stabilize, the market has seen that rise to 15-17 months, even longer in some cases. Delayed deliveries, increased competition, and concession battles are all stretching out the time to stabilization, requiring significantly more effort to achieve lease-up goals.

Combined with high supply in select regions, Andrew Wittgen, Executive Managing Director of RangeWater Real Estate, emphasized the importance of nailing the basics: tour paths, understanding and preparation of inventory, and finding good talent that can be trained quickly. RangeWater focuses on hands-on engagement at its community manager summits, reinforcing these fundamentals. “We are constantly trying to recruit from the hospitality area of high-end restaurants and hotels. I pass out 100 business cards every two weeks, trying to draw people in because I know we need the best talent that we can get to help deal with this inventory.”

Lesa also warned that heavy concessions today can become tomorrow’s retention issues. As a lease-up’s first wave of residents approaches renewal, owner-operators will hit a wall if their initial concessions can't be matched, creating renewal friction that will need to be tackled.

As a solution, Aaron shared that some owner-operators are also experimenting with smarter concession strategies, like spreading offers over a resident's first and second lease to reduce sticker shock later. This more sustainable model aims to retain residents longer and minimize costly turns.

Affordability pressure is real—but uneven

The affordability narrative in multifamily is often too broad and doesn’t reflect exactly what’s happening. Sharon broke it down clearly: “You hear all the time that wages are not keeping pace with rent increases. When you break it down, we are at almost historic lows of wage-to-rent ratios at the highest level of renters. At the mid-level of renters, it’s still in the 23-24% range. Where we’re really losing it is at that low-to-moderate income renter where the situation is completely reversed.” This skew makes national averages misleading.

Adding to the story is rising consumer debt. Aaron shared that U.S. household debt hit $18 trillion in Q4 2024. TheGuarantors' internal data mirrors that strain: FICO scores for approved renter applicants dropped year over year and probability of default has risen across screening standards during the same period. While these are national numbers, increasing delinquency rates in credit cards and auto loans, in addition to growing household debt, may point to growing financial stress among consumers, including renters, though multifamily doesn’t seem to be feeling the impacts yet.

Panelists noted that this data shift requires recalibrated screening processes and risk mitigation tools. While there's a temptation to lower credit thresholds, several leaders cautioned that such moves often increase evictions and delinquency.

The path forward? Focused affordability solutions for lower-income residents and layered screening supported by financial backstops.

Economic occupancy: the metric you might be missing

"We used to care [only] about physical occupancy. Now it’s all about economic occupancy," said Greg Curci, reflecting on how the COVID era’s spikes in bad debt recalibrated performance metrics. This has drawn more focus to activities that can increase rent collection, secure rent roll, and minimize bad debt.

Morgan Properties has found that the leading indicator of renter default is not necessarily income levels, but credit scores. “...Our screening department pays very close attention to credit. You can have a very high income, but if you are indifferent to your credit score, then that’s a risk to us. We’ve seen it over and over again,” Greg shared.

The reevaluation and heightened focus on screening methods and delinquency mitigation is a focus for many. Lesa highlighted that Avenue5 has placed a strong focus on delinquency management, even to the point of introducing a centralization model that includes somebody overseeing a dozen properties to focus on delinquency, resulting in a positive impact on collection rates. They have also created an entire department focused on screening, allowing for thorough test and learn of their severity model; for example, they can conduct a lookback analysis to understand how more approved renters a specific tweak to the model could have resulted in. Lastly, several tools have helped Avenue5 in their efforts to strengthen economic occupancy, including TheGuarantors, Flex, and Colleen AI.

Andrew Wittgen reinforced the success of a centralized model, sharing that “[it] is helping on our collections. We did a beta test of 20 properties last fall and we saw a dramatic improvement by taking that away from the on-site team.”

Redefining the resident—and the product they want

The panel discussed how development and operations are shifting, especially as Gen Z emerges as a dominant resident demographic, over 50% of whom do freelance work.

Brett noted a retreat from luxury urban high-rises toward garden-style communities in suburban markets. He explained, “From an investor standpoint, [there’s] an aversion to the higher basis, more expensive cost of construction, but also spicier pro forma assumptions in order to make those urban developments work.” With effective rents being a bit impaired and an interest rate environment that is unstable, if developers are going to miss, they want to miss small and that’s more likely with a garden deal in the suburbs with a lower cost basis. “This reflects the cross-section of American renters who are impaired on so many levels throughout their own consumption—the cost of groceries, gas, school, vehicles—everything’s up,” added Brett.

Unit size and amenity expectations are evolving too. As more workers return to office more often, developers are trying to decrease unit square footage while offering increased value through shared spaces. Lesa emphasized demand for health and wellness forward offerings—fitness centers, virtual trainers, yoga instructors, and on-site events with value-add guests such as financial planners.

Digital-first marketing is no longer optional. Both Avenue5 and Morgan Properties are investing in robust property websites with interactive floorplans, self-guided tour booking, and hyper-local content, while also maintaining focus on top-tier on-site staff. Greg summed it up: "A younger generation wants to self-serve up to the point when they’re a customer. They would prefer their communication come from text…but once they are on site, they’re not afraid to walk into the leasing office [to talk].”

Cost pressures and new operational levers

Owners and operators are still facing an elevated level of baseline costs in 2025. The panel shared their perspective on the largest drivers of increase and solutions to alleviate some of the operational burdens.

Sharon identified state and local taxes as a driver that people may not spend enough time thinking about. “[They are] a huge part of the rental operating stack coming out of COVID. Wages for police, firemen, [and] other things have continued to increase at a high level.” She also pointed to escalating insurance premiums, some of it being climate driven. According to a recent NMHC survey, a significant driver of this increase includes general liability coverage, largely due to increased activity by class action lawyers and increased nuclear verdicts, even on slips and falls. Cyber coverage has also become volatile, given that owner-operators are holding a lot of people’s private data and information. What comes next for insurance costs? “I think there’s some thinking that it’s going to come down a little, but we’re at a higher level overall. It’s going to be a long haul, it’s not going to happen tomorrow,” Sharon concluded.

Operationally, companies are doing more with less and continuing to optimize spend. Lesa shared Avenue5’s "potting" strategy—a regional staffing model that shares staffing across properties in close proximity while being careful not to diminish the resident experience by spreading staff too thin. It’s one way to tackle rising payroll costs. They’re also laser-focused on marketing spend on an ongoing basis; if some of the dollars being spent don’t have a direct relationship to getting a lease, they pivot.

Greg highlighted the high costs of both on-site staff and resident turnover, pointing to Morgan Properties’ proactive efforts to increase retention. “We’ve set about trying to make onsite jobs stickier by way of higher compensation and taking some of the noise out of their day and centralizing activities, so that they’re not doing a lot of administrative tasks that can be unrewarding,” shared Greg. To address higher than desired resident turnover and the associated costs, Morgan Properties takes a more gentle approach on renewal increases alongside better outreach and customer service, resulting in a three percentage point increase in resident retention and three million dollars in cost savings, excluding downtime.

Conclusion: Success requires precision—and people

A few messages are clear from this robust discussion. Over the next year, owners and operators can increase success and profitability if they staff smartly, train effectively, spend efficiently, adjust to changing renter demographics, and retain more staff and residents. Most importantly, although AI continues to capture the airwaves, people will be at the heart of every win—on-site teams who connect with residents, regional managers who keep eyes on the data, and partners who make risk manageable.

TheGuarantors: Enabling resilience

From accelerating lease-ups to minimizing impact of renter fraud and reducing bad debt, TheGuarantors remains a partner for owners and operators, trusted by 9 of the country’s top 10 operators. Our suite of risk-mitigation solutions help you convert more applicants, secure your rent roll against risk, and improve NOI—all at no extra cost.