North Carolina

For all Top 50 NMHC third-party management firms, the subject of managing rising operating costs is a topic that has come to be front and center in many recent client conversations.  “As 2025 budget discussions were taking center stage toward the end of 2024, our clients increasingly highlighted the issues of rising operating costs,” says Lisa Narducci-Nix, director of business development at Drucker + Falk.  “This trend”, she adds, “underscores our need for strategic planning and cost management to navigate the continued challenges ahead.”  The multifamily sector is facing unprecedented headwinds as operating costs continue to rise, driven by factors ranging from inflation and labor shortages to increased insurance premiums and energy expenses. As a result, multifamily operators are working to find ways to maintain profitability while providing quality living spaces for their residents.  “In this challenging environment, it is clear to us that adapting to these rising costs will require a multifaceted approach — one that blends innovation, strategic marketing, operational efficiency and technological adoption,” says Narducci-Nix. Challenges of rising costs Across its 11-state footprint spanning over 42,000 units, Drucker + Falk has seen operating costs for many of its managed assets surge in recent years. The supply chain …

This year, multifamily housing starts nationally are on pace to hit their lowest levels since 2014, a period marked by the national economy’s gradual recovery from the Great Financial Crisis. Year to date, multifamily deliveries have exceeded starts by 218,500 units, creating a substantial shortfall that signals a significantly reduced apartment supply by 2026.  The same trend is taking effect in Raleigh-Durham, where completions exceeded starts by 4,935 units. This is a key consideration for most apartment investment strategies today, explaining why many buyers are willing to accept Year 1 challenges such as softness or negative leverage. As the current supply wave peaks in the Triangle, the future pipeline of multifamily construction is shaping up quite different. Of the identified units that are scheduled for delivery in 2024, nearly 42 percent of units have been delivered as of this writing. Of the approximately 18,600 apartments currently under construction across the Triangle, 13,343 of those are expected to be delivered by the end of third-quarter 2025, with a majority in Central and Southeast Raleigh.  However, new activity has slowed significantly — inventory growth by 2027 is projected to drop by more than 85 percent, plummeting to a 3.6 percent rate compared …