top of page
  • AREHoldingsGroup

Recession-Resistant Investments


Multi-family investments performed better than other real estate investments during the last recession
Multi-family investments performed better than other real estate investments during the last recession

Economic uncertainty amidst potentially the longest bull market on record and fears of a looming recession may cause investors to wonder if it is the appropriate time to invest in real estate. Reviewing the data from the last recession will provide confidence that real estate investments will be a safe-house for investors if there is another economic downturn. This article discusses how multi-family real estate fared during the last recession relative to other investment vehicles.


During the recession default and loan delinquency increased among all classes of real estate however Multi-family experienced lower rates of default. This is important to note as the real estate market was at the center of the last recession. The following chart from The Mortgage Bankers association shows that the greater number of delinquencies came from single family real estate with a sharp increase in 2008.




Rate of mortgage delinquency greater among single family real estate during the great recession showing multi-family investments were less affected.


The Joint Center for Housing Studies of Harvard University reports that Fannie Mae delinquent multifamily loans increased “from less than 0.10 percent at the start of 2008 to a peak of 0.8 percent in the second quarter of 2010” while Freddie Mac rose “from 0.04 percent to 0.35 percent.”


One reason Multifamily delinquencies may have had lower delinquencies is due to their income producing ability being less affected by the recession. The following chart by the Mortgage Bankers Association shows how the net operating income (NOI) decreased less and recovered sooner than other real estate investments.




Multifamily net operating income decreased less and rebounded sooner that other real estate classes.


The softer dip in NOI may be due to the fact that vacancies at multifamily properties decreased but remained fairly stable compared to other asset classes. Charge-offs, when an institution declares a debt unlikely to be collected, were also far less for multifamily loans than any other form of loan during the great recession. This may also be a result of the smaller dip in income multifamily experienced.

The reasons multifamily fared better are outside of the scope of this post. You may read about them in future articles about why multifamily is a sound investment compared to other forms of real estate.


At ARE Holdings Group we sponsor and manage syndications that allow passive investors to have access to real estate investment opportunities with high cash flow. These passive investment opportunities may be the safe house for the next recession, whether that is in one year or ten.


If you are ready to invest in real estate or would like more information please visit the ARE Holdings Group contact page or text “Why Real Estate?” to (516)-519-3869 so we can match you with the investment opportunity that best meets your needs.



bottom of page