The figures contained herein focus on metro area multifamily buildings and/or complexes with a minimum of 12 units. Small-scale multifamily properties consisting of duplexes, townhomes or condos do not accurately affect local capitalization rates (cap rates), vacancy or rental rates and are therefore excluded from this analysis.

Market Overview

Housing continues to be in short supply, ultimately contributing to record-low multifamily vacancy rates. The majority of class B and C properties are hovering at or slightly above 5% vacancy while most newly constructed apartments were leased to 95% occupancy within the first three months of completion.

Changing market conditions and higher interest rates have led to less inventory and turnover. Very few apartment complexes were sold within the Cedar Rapids metro area. The properties that did trade hands were smaller, most between 12-24 units, with an average cap rate of 7.28%.

Looking Ahead

The rental market will continue to be robust as higher interest rates allow fewer consumers to qualify for single-family home ownership. While rents have increased over the past few years, it appears they are at or near their peak and will begin to stabilize.

While the cost of building materials has decreased, the cost to construct new properties is not supported by current market rents. Developers will continue to seek incentives, primarily in the form of tax credits, to assist in bridging the gap between the cost of construction and achievable market rents.

Linn County Iowa Statistical Data

Significant transactions announced, in progress, completed or traded

  • 627 6th St. SE, Cedar  RapidsCedar Rapids Brickstone — 44-unit four-story affordable housing complex with a nonprofit partner component — $12,200,000

Large-scale mixed-use projects announced, in progress, completed or traded