For years, Richmond occupied an interesting position in the Mid-Atlantic multifamily landscape: large enough to attract institutional capital, but often overshadowed by bigger markets such as Washington, D.C., and Northern Virginia.
That is changing.
Richmond has moved considerably higher on investors’ target lists over the past several years, initially propelled by the migration patterns that emerged during the pandemic. People flocked to Richmond for its relatively affordable housing and quality of life.
While that migration isn’t occurring at COVID-era levels today, those fundamentals remain. Increasingly, investors are recognizing that Richmond offers something particularly valuable in the current environment: attractive yield in a market where pricing has not necessarily caught up with the underlying fundamentals.
Fundamentals hold up
Richmond’s multifamily market is absorbing a meaningful amount of new supply while continuing to generate rent growth.
Effective rents reached $1,658 at midyear, representing 4.1 percent growth, while occupancy stood at approximately 94 percent, according to Pyxis. The market absorbed 2,733 units over the previous 12 months, according to research from CoStar Group.
Those numbers are particularly noteworthy given the recent construction cycle. Nearly 7,000 units were completed during the past 12 months. Another 5,736 are expected during the coming year, according to Pyxis.
Richmond is certainly not immune to the supply pressures affecting multifamily markets nationally. But the impact has been uneven, with much of the new inventory concentrated in a handful of submarkets. More importantly, the pipeline is beginning to moderate: expected deliveries over the next 12 months are roughly 18 percent below the number of units completed during the previous year.
That direction is consistent with what we expected entering 2026. Berkadia forecasted that in-migration and employment growth would support absorption of nearly 2,500 units this year, comfortably above Richmond’s average from 2015 to 2019. With fewer deliveries, operators should have more room to grow rents organically rather than compete primarily through concessions and discounting.
There is economic support for that thesis as well. Median household income is projected to rise 3.9 percent this year to $90,744, while employment is expected to increase 0.4 percent and unemployment remain relatively low at 3.8 percent. Richmond also benefits from a diversifying employment base, led by sectors including healthcare, education and financial services, which provides an important foundation for long-term rental demand.
The growth story is also becoming increasingly visible on the ground. The 67-acre Diamond District redevelopment, anchored by the new CarMax Park ballpark, is bringing hundreds of new residential units and additional commercial development to the northern downtown corridor. CoStar Group’s expanding downtown campus and SanMar Corp.’s 1.1 million-square-foot flagship distribution center are also adding to the region’s employment base.
Chesterfield and Henrico counties are investing in schools, retail and infrastructure, while Scott’s Addition continues its evolution into one of the region’s most dynamic mixed-use neighborhoods. All three are areas we believe offer compelling opportunities over the next three to five years.
Just as important, renters have demonstrated they can afford more than where the waters were tested historically. That has opened the door for institutional developers and created new opportunities for out-of-market capital.
Capital eyeing Richmond
Yield remains one of Richmond’s clearest advantages.
On a trailing basis, Richmond doesn’t differ substantially from some surrounding Tier 1 markets. But it can offer investors a clearer path to neutral or positive leverage within 12 months. In today’s capital environment, that matters.
Investment activity reflects that interest. Richmond recorded a little more than $1 billion in multifamily property sales during the 12 months ending June 30, 2026, according to MSCI Real Capital Analytics, based on properties of 100 units or more. Transaction volume in the Richmond MSA reached nearly $614.1 million during the first half of 2026 alone, already approaching the $679.49 million recorded in 2025, putting the market on pace to significantly surpass last year’s total.
Transaction volume is still recovering from the slowdown that followed the rapid rise in interest rates in 2022 and 2023, but the buyer pool is broadening. Richmond has moved higher on the target lists of institutional and out-of-market investors, particularly for newer core and core-plus properties that can offer attractive going-in yields without requiring an aggressive value-add thesis.
Recent trades help illustrate that appetite. New York Life acquired the 305-unit Innsbrook Square for $81.7 million during the first quarter, while American Landmark purchased Boulders Lakeview for $51.5 million and Fulton Peak Capital acquired Innslake Place for $51.3 million. More recently, Weinstein Properties acquired the 373-unit 2000 West Creek Apartments in one of the market’s largest multifamily transactions of the year.
Investors pay for certainty
The pricing gap between buyers and sellers has tightened considerably compared to the past two years. Where gaps remain, they tend to be associated with risk.
A value-add deal that relies heavily on renovation premiums to make the numbers work is going to face more scrutiny. A recent lease-up may have exposure on the back end because of surrounding supply. Even a core-plus deal can be at the liberty of the capital markets to maintain pricing.
Without a true “center of the fairway” opportunity, the pricing gap often comes down to risk tolerance and whether there is enough support in the underwriting to reach target yields.
That is also influencing which assets attract the most capital. Core and core-plus are seeing the most active interest, but well-located value-add product isn’t far behind. Newer properties, when priced correctly, are attracting particularly deep buyer pools. Some brand new assets are pricing to core-plus returns, creating opportunities that have a lot of groups paying attention.
What’s changed is the conversation around those opportunities.
A year ago, basis seemed to dominate. Today, location is proving paramount, and we spend considerably more time providing certainty around rent-growth assumptions.
At the other end of the spectrum, heavy value-add and fringe-location properties remain harder to get done. Exit assumptions from both buyers and lenders can handicap value. Those properties can still offer strong yield and an attractive buy box for investors with the capital to maintain them through their hold period, but there is less room for underwriting error.
The next phase
For investors evaluating multifamily markets today, Richmond deserves serious attention before pricing fully catches up with its fundamentals. Demand has held up through a significant construction wave, rents continue to grow and the pipeline is beginning to moderate.
Looking further out, new supply also faces meaningful constraints. Zoning and the entitlement process create high barriers to entry, while the pipeline of viable development sites is limited. That dynamic could become increasingly important as the current wave of new apartments is absorbed.
Taken together, these fundamentals create opportunities to acquire existing assets below replacement cost while preserving meaningful upside.
Richmond may not yet be the obvious answer for every multifamily investor. That may be precisely why it’s worth paying attention to now.
— By Drew White (senior managing director), Carter Wood (managing director), Cole Carns (director of investment sales) and Matt Straughan (senior director of investment sales), Berkadia. This article was originally published in the August 2026 issue of Southeast Real Estate Business.