Monday Market Moves | Week of December 8, 2025

Welcome to Monday Market Moves, the weekly series from Essex Capital Markets briefing you on Chicago commercial real estate capital markets. We cover key trends in CRE debt, refinancing, and capital structures to help investors, borrowers, and lenders navigate today’s CRE financing market.

This Week: Multifamily Resurgence Signals Renewed Confidence, With Chicago’s Mid-Market Leading the Way

After two years of uncertainty, the multifamily sector is showing clear signs of renewed strength. Stabilizing interest rates, improving liquidity, and steady renter demand have boosted investor confidence heading into 2026. National reports highlight stronger absorption, improving pricing, and a rebound in transaction activity, particularly in well-located Class A and Class B assets.

In Chicago, the recovery is even more pronounced in the mid-market segment. According to reporting from The Real Deal, multifamily properties priced between roughly $1 million and $10 million are experiencing heightened buyer activity, competitive bid environments, and consistent closings. This part of the market is proving to be one of the city’s most resilient categories as 2025 comes to a close.

National Landscape: Multifamily Reclaims Its Momentum

Across the country, multifamily continues to lead the CRE investment landscape.

• Investor confidence has improved as interest rate expectations stabilize and liquidity strengthens across lenders.

• National multifamily transaction volume is beginning to recover, supported by lower supply pipelines and rebounding renter demand.

• Analysts note that cap rates are showing signs of continued stabilization, positioning multifamily for a stronger pricing environment in 2026.

Despite elevated borrowing costs relative to the 2021–2022 cycle, multifamily remains the preferred asset class for both institutional and private capital sources.

Chicago Signals: Mid-Market Multifamily Surges Ahead

Chicago’s mid-market multifamily sector is outperforming broader CRE trends.

• The Real Deal reports robust activity across the $1 to $10 million range, with several submarkets seeing accelerated tours and multiple-offer situations.

• Buyers are gravitating toward value-add and stabilized assets with clear rent growth potential and strong neighborhood fundamentals.

• Competitive pricing is holding, driven by a consistent pool of private investors and owner-operators who continue to view Chicago as attractively priced relative to coastal markets.

For owners and investors navigating the market, mid-market multifamily stands out as one of the city’s most liquid and active segments.

Opportunities and Risks

Opportunities

• A growing pool of buyers and improved financing conditions may support stronger pricing through early 2026.

• Stabilized assets with clean operations continue to draw interest from both regional buyers and exchange-driven investors.

• Lenders active in the $1 to $10 million range are offering competitive pricing for strong borrowers, especially for well-leased walk-up assets.

Risks

• Borrowing costs remain elevated relative to pre-2023 norms, which may limit proceeds even as demand returns.

• Value-add strategies must be supported by realistic rent growth expectations as some submarkets moderate.

• Weakening macroeconomic fundamentals may contribute to increases in both underlying interest rates and lender spreads as we move into mid 2026.

Bottom Line

Multifamily continues to show improvement, and Chicago’s mid-market is at the center of that momentum. Strong demand, active buyers, and resilient pricing are signaling a healthier path heading into 2026. For investors and owners considering acquisitions or refinancing, this segment of the market offers both stability and opportunity as capital flows redirect back into multifamily.

Sources:

• The Real Deal – Mid-Market Multifamily Sales Strengthen in Chicago
• CRE Daily – Multifamily Rebound Signals Renewed Investor Confidence
• CRE Daily – Cap Rates Decline, More Drops Expected in 2025

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