Market Commentary
The Michigan multifamily sector is showing resilience amid elevated borrowing costs and moderate new supply.
In West Michigan (Grand Rapids region and surrounding markets), occupancy reached ~94.0 % in Q2 2025 and asking rents averaged ~$1,358/month, representing a ~3.6 % year-over-year increase. Colliers
In the Metro Detroit market, occupancy in stabilized assets stood at ~94.8 % as of May 2025, and asking rents rose ~2.9 % year-over-year. Yardi Matrix
On the supply/development side: West Michigan alone has 4,654 units under construction and a healthy pipeline. Colliers+1
On the investment side, transaction volume remains soft compared to peak periods. For example, West Michigan Q2 2025 sales volume was ~$89.3 M (down significantly from Q1). Colliers
On the policy front, the Michigan State Housing Development Authority (MSHDA) and the legislature are pushing aggressively to increase housing inventory — over 22,000 units were added statewide recently. Michigan.gov+1
Recent OakPointe Closings OakPointe Real Estate Advisors recently closed two multifamily transactions in Ferndale among others:
500 E. Maplehurst Avenue — a fully renovated 10-unit property that sold for $1,579,500, achieving aggressive per-unit pricing and a cap rate reflective of strong demand for stabilized Class B assets. OakPointe was also retained for ongoing property management services.
1010 LaPrairie Street — a 9-unit value-add asset that sold for $1,225,000, closing in just 26 days with nine written offers and final pricing $25,000 above asking.
These deals highlight the continued investor appetite for well-located, small-to-mid-size assets in prime infill submarkets, even as capital markets remain tight.
Why this matters: With homeownership becoming less affordable, demand for rental housing remains elevated. That supports multifamily fundamentals. However, elevated interest/tax costs, slower transaction velocity, and new supply pipelines are moderating upside.
Regional Snapshots
Metro Detroit
Occupancy ~94.8%. Asking rents up ~2.9% YoY. Yardi Matrix
Under construction: ~3,100 units; in planning/permit stage: ~28,000 units. Yardi Matrix
Investment volume for first half of 2025 tracked only ~$41 M, well below ~$145 M in first half 2024. Yardi Matrix
Insight: Good rent/occupancy tone, but transaction activity is low — likely a “wait-and-see” posture among investors as cap rates and debt markets evolve.
West Michigan (Grand Rapids & region)
Asking rents: ~$1,358/month in Q2 2025; up ~3.6% YoY. Colliers
Vacancy (stabilized) ~5.3%, overall ~6.0%. Colliers
Sale price per unit has declined significantly (to ~$77,841/unit) — a sign that pricing is recalibrating. Colliers
Insight: Strong rental demand, but pricing and investment returns are under pressure. Older stock may tighten as new deliveries get absorbed.
Other Markets (Lansing / Kalamazoo)
Trends Worth Watching
Supply pipeline: Even though demand remains solid, a continued wave of new units could cap rent-growth or pressure older properties. (E.g., West Michigan has thousands under construction) Colliers
Smaller unit sizes: In Detroit, new multifamily units (50+ units buildings) average ~728 sq ft — ~20% smaller than a decade ago. Axios
Affordability & policy tailwinds: With Michigan policymakers signaling large investment in affordable housing, partnerships or tax-advantaged deals may increase. AP News+1
Investment pricing adjustments: We’re seeing lower sale prices per unit and investor caution — this could create opportunity for those with strong underwriting and execution.
Migration and demographic shifts: While Michigan doesn’t see the same in-migration as some Sun Belt states, its strong rental markets (especially for affordable multifamily) remain attractive.
Implications for Investors
Underwriting: Be conservative on rent growth unless property has clear value-add and lease-up path.
Asset selection: Consider secondary markets with value-add upside, still-sub-$100k per unit pricing (depending on sub-market).
Tenant profile: Given shifting preferences (smaller units, younger professionals, renters delaying home ownership), properties offering flexibility, amenities, and affordable pricing have an edge.
Debt and hold strategy: With higher interest rates and cap rate pressure, longer hold periods may be prudent.
Partnering & sourcing: Relationships and local knowledge matter — now more than ever given competition among capital sources.
Final Take
The Michigan multifamily market is stable and quietly compelling. Demand remains strong, rent growth is positive (though modest), and supply pipelines are meaningful but not yet disruptive. This means: staying nimble, focusing on sub-markets with strong fundamentals, and presenting well-underwritten opportunities to capital sources who are actively seeking yield in a higher-rate environment.
Opportunity exists – but pricing discipline and operational excellence are critical.
Current Listings & Pipeline Activity
OakPointe is currently marketing a range of stabilized and value-add multifamily opportunities across Michigan, including deals in Lansing, a 17-unit waterfront property in Whitmore Lake (under contract), and a broader offering under the Mid Michigan Portfolio.
Mid Michigan Portfolio Highlights
Total Units: 306
Financing: USDA-assumable debt totaling ~$7.5MM @ 4.25% fixed through 2042
Investment Thesis: This workforce-housing portfolio provides scale, geographic diversification, and durable in-place cash flow across eight stable Michigan markets. With long-term fixed debt and steady occupancy, the offering appeals to private and institutional buyers seeking yield, inflation protection, and operational upside through light value-add execution and regional management efficiencies.
For additional details or access to the full data room, contact Michael McClafferty | OakPointe Real Estate Advisors | 248-972-7040.
Disclaimer
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