Morningstar DBRS has published a comprehensive analysis of the North American multifamily rental market targeting property owners and operators from a credit-risk perspective. The three-part research series delves into the intricacies of the sector, offering a detailed exploration of the current and future state of the market in both Canada and the US.

In the first published installment, the group asserts that the strong multifamily fundamentals found in key undersupplied North American rental markets will continue to provide multifamily owners/operators the ability to increase revenues amid rising construction costs, high prices for land, and the shortage of skilled labour. In addition, it warns that larger rental housing operators with strong ownership, liquidity, robust access to capital, and a balanced capital structure will be better positioned to withstand economic fluctuations and maintain favourable credit ratings—in other words, smaller regional operators with have less of a competitive edge.

“While the North American multifamily rental sector will face numerous challenges in the near to medium term, such as economic uncertainty, cost inflation on services, taxes, insurance, high interest costs, and challenging labor supply, experienced multifamily owner/operators should be well equipped to mitigate these and other risks,” said Aniruddha Jadhav, Assistant Vice President – North American Corporate Real Estate Ratings.

For the full report entitled, “The Multifamily Market Metamorphosis: Exploring North American Multifamily Rentals Through the Real Estate Methodology”, click here:  dbrs.morningstar.com