Thoughts From Jared
The world is changing quickly, especially in the face of AI which notably is a “hot word” nowadays.
With that being said, I am embracing AI increasingly (specifically Claude) and I am more and more
impressed with what it can do! IFor some of us who study history or many who may have been
around during the internet and Dot Com boom this feels similar. While Groceries.com may not
have taken off in late 1990’s it was nonetheless ahead of its time and when COIVD-19 hit getting
groceries delivered became the norm…I have a feeling AI will be the same
Personal AI assistants may be a little science fiction today but I have no doubt that in 10-20 years
they will be the “norm.”
What does this mean for commercial real estate and multifamily owners? It means, it’s time to
adapt! In the face of inflation and higher wages as well as higher costs we need to find ways to
automate and use technology to find efficiencies. I already know of AI being used in customer
relation focused multifamily such as work orders, showings, renewals, etc. As I look at this
impending debt-reset that is already beginning it is becoming more and more evident to me that
strong operations and management skills will be crucial to having a successful commercial real
estate investment…especially one that can operate on the new margins due to lower rents and
higher expenses…
If you are not yet using AI in a weekly fashion in your business I can honestly say
you’re behind, I, myself am using it every day in my business and I AM BEHIND!
If you would like to learn more about how I am using AI OR how you can use AI in
your business just give me a call and I’m happy to jump on a 15-minute Zoom with
you to discuss how you can use it to simplify your life and business…
The future is here!
And now that it is here, let’s take a quick look back at the last 3-months to see what
has already happened in an effort to embrace the future more effectively!
Executive Summary
What Does this Report Say in Less than 3-Minutes?
Central Iowa Apartment Market Q1-2026 Performance
- Sales Volume: $103.55 Million Sales Volume
- Price Per Unit: $104,280
- Price Per Square Foot: $96.52
- Cap Rate: 6.66%
Central Iowa Apartment Market 2025 Performance
- Sales Volume: $831.23 Million Sales Volume
- Price Per Unit: $103,653
- Price Per Square Foot: $110.60
- Cap Rate: 6.89%
Des Moines Multifamily Market Insights
- Occupancy Rate: 91.4%
- Rent Growth: 0.6% Year-over-Year
- Development: 1,904 Units under construction, down 40% from last year.
Three Things to ALWAYS Consider…
- Buying Opportunities:
If you are looking for opportunities, 1960-1970 apartments are trading at 60%-70% of the average prices and more than 50% compared to new apartments and cost to replace. The challenge will be insurance and financing but if you can solve these solutions there seems to be a buying opportunity currently. - Holding & Refinancing:
Strong management skills and the ability to insulate net operating income will be crucial for anyone looking to hold or refinance in the face of rates resetting. - Selling or Disposing:
If you own newer assets (newer than 1980) there is a strong opportunity to sell currently as that is the new “In-Style” asset. Older assets are struggling to get financed and insured and only sell these assets WITH a strong 1031 in-place OR a strategy.
Questions I am Asking:
- Buyers: If I can upgrade the older assets to new quality to get insurance and financed, could I get 80% of the rents new complexes achieve? Do I have enough capital to fund these large CapEx items?
- Sellers: How long can Des Moines continue to achieve record sales prices and sales volume while many other cities and states struggle with rental growth and vacancy?
The Iowa Market Summarized in Two Sentences…
The start of 2026 has continued the theme of how 2025 ended; with record sales and a strong market.
Central Iowa Multifamily
How Did Central Iowa’s Apartment Market Perform Last Quarter?
The start of 2026 began much like how 2025 ended with a robust sales’ quarter. We had 18
invididual sales compiling in $103.55 million of sales volume with price per units at $104,280, price
per sq. ft. at $96.52 and actual Cap rates hovering around 6.66%. The average transaction was a
55 unit complex built in 1977.
What trends did WE identify in the Statistics?
- Looking at not only the first quarter of the year but also the last quarter of last year, it appears we are on pace for strong years of multifamily sales in Central Iowa, with current predictions being the 2nd or 3rd best sales volume year if sales continue.
- One reason for stronger sales volume is the style of units being sold which consistently are newer and larger assets which is bolstering prices.
How will these trends affect:
- Buying or Acquiring?
- There appears to be opportunity to purchase older and C-Class assets at below market averages provided they can underwrite management and capital improvements accurately.
- Holding or Refinancing?
- Interest rates have jumped in the last quarter due to the war in Iran and international conflic with some Fed officials calling for a rate increase! Watch the rates carefully if you are considering refinance.
- Selling of Disposing?
- For properties newer than 1980 and 100+ units it may be an opportune time to sell. For older C-Class assets pricing may not be reflective of seller’s goals.
Iowa Economy
How do we track the Iowa Economy?
Over the last 6 months, it appears that the Iowa economy has been growing slightly at about 0.5% per year, and Iowa’s GDP grew from $265.8 billion by 4.65%. However, Iowa continues to rank 47th in out-migration, which is a signal for Iowa Multifamily investors that rental growth will be tepid due to less need for housing amongst the highest percentage of renters by age.
What I’m Watching?
Listings have surged almost 300% across all of Iowa over the last 6-months which means more
options for buyers but also more competition for sellers.
What I’m Hearing?
Over the past several months in speaking with ownership groups I am hearing about the
impending debt burden becoming real with many ownership groups discussing refinances
coming in the 3rd quarter of 2026 through the 2nd quarter of 2027. This reinforces WHY we
are seeing listings accelerate.
What I’m Seeing?
The impending debt balloon is beginning, with property taxes in question (see below),
insurance rates high, rental growth stagnant, and vacancy high; the next 24-36 months look
challenging for ownership groups. Maintaining strong management and insulating net
operating income will be critical for ownership groups looking to hold, refinance, or sell
Iowa Property Taxes
We must spend a few minutes talking about the bills proceeding through the Iowa congress in
regards to property tax reform AND this is the most important policy development for Iowa
multifamily owners in 2026 — here’s what each version of the bill means for YOUR taxes.
National Economy
What is Happening Nationally In the Multifamily Market?
The national multifamily market came through its worst year since the global financial crisis from a rent growth standpoint and 2026 started flat as well. The fourth quarter of 2025 registered the weakest rental performance since the global financial crisis with average asking rents declining $16 quarter-over-quarter to $1,737, wiping out all yearly gains and closing 2025 at exactly 0% annual growth.
What are Some Trends Nationally?
In conversations with CCIM’s and agents across the country, I continue to hear of: No rent growth, 10% vacancy is normal, and many investors who bought in 2021-2023 are writing off their equity positions and selling at 65%-75% of purchase prices. One opportunity may be to sell the “Midwest” and “Buy” the coasts or down markets for the opportunistic buyers.
How do you Profit?
- Buying or Acquiring?
- While there is a short-term trend of low rent growth, high vacancy, and REO properties; long-term wealth accumulation now may be a good buying opportunity.
- Holding or Refinancing?
- Stabilizing net operating income and strong management skills will be critical to surviving any short-term pains in the market as well as convincing lenders to lend money on projects.
- Selling or Disposing?
- If your asset is newer than 1980 and over 100+ units, there are many active buyers looking for properties like yours; additionally, smaller properties under 16 units continue to attract buyers, and now may be a good time to consider a sale.
What have WE been Selling and LYSTing JUST in 2026?
SOLD
104 Arden St, Waterloo, IA
For more information on Listed, Sold, or Sale Pending properties please contact me! Thank you.
Disclaimer
Provider is a licensed real estate agent and has the rights to sell real estate in the state of Iowa.
All information was obtained via 3rd parties including but not limited to Yardi Matrix, Iowa-Leading Economic Indicators, CoStar, and more. All effort was made to ensure the accuracy, timeliness, and completeness of information provided for publication. KW Commercial does not guarantee, warrant, or represent that all information is accurate or complete and is not liable for any loss, claim, or demand arising from the direct or indirect use or reliance upon information provided.
Behind the Desk
Jared is a 3rd generation real estate entrepreneur growing up with a grandfather who was a homebuilder and investor; a father who was an electrician, developer, and investor; and a mother who was a residential investor, manager, and bookkeeper. With this extensive knowledge as well as being an owner himself for over 15+ years and involved in over 200+ individual transactions he has extensive experience in; financing, operations, management, development, construction, bookkeeping, brokerage, and entrepreneurial activities.
Having helped clients purchase and sell over $100+ Million of real estate personally as an agent-advisor Jared has helped his average client earn over 26.95% rate of return on their real estate investments.
In his spare time has has many hobbies which include but are not limited to: traveling, mountain climbing, hiking, piano, ballroom dancing, Latin dancing, pilot, Spanish lessons, and is always looking for a new adventure.
