Webinar: Distress Creates Opportunity: Multifamily in 2026 with Mark Allen
As market conditions continue to reset, distress is beginning to surface across multifamily — and with it, opportunity.
In a recent webinar, Mark Allen, Vice Chair at Colliers, shared front-line insights into what 2025 sales and distress data are revealing about the multifamily landscape heading into 2026. His perspective was clear: this is not 2008 — but it is a pivotal moment.
For investors who understand where to look, the next 12–24 months may represent one of the most compelling windows in recent memory.
This Is Not 2008 — But It Is a Capital Stack Problem
A natural question in today’s environment is whether we’re heading toward another Global Financial Crisis scenario.
Mark drew a sharp distinction.
In 2008, the system experienced a credit freeze. Debt and equity capital largely disappeared. Transactions stalled because financing simply wasn’t available.
Today, capital exists — but it has repriced dramatically.
The rapid shift in interest rates from near 0% to 4%+ created broken capital stacks across many assets. Deals underwritten during ultra-low rate environments can no longer support their original leverage assumptions.
The issue isn’t lack of liquidity. It’s misaligned debt structures and maturing loans.
That distinction matters.
The Early Signs of Distress
According to Mark, the clearest distress is emerging in:
Pre-1990s vintage properties
Assets purchased at aggressive cap rates in 2021–2022
Properties with floating-rate debt now facing refinance
Many older assets are reportedly trading at less than 50% of their peak value.
The reason isn’t just interest rates — it’s the combination of:
Increased insurance costs
Property tax pressure
Slower rent growth
Supply outpacing demand in certain submarkets
Lenders are beginning to act. While extensions and loan modifications have been common, foreclosures and lender-owned assets are increasingly entering the market.
February and March are already showing signs of accelerated deal flow.
What the Data Says About the Economy
One surprising data point from 2025: job growth was slightly negative (-0.1%).
That headline sounds concerning — but context matters.
Unemployment remains far below 2008 levels, particularly in strong markets like Dallas-Fort Worth. While supply temporarily outpaced demand in 2024–2025, the long-term fundamentals of Texas — population growth, business migration, and demographic tailwinds — remain intact.
This isn’t structural collapse. It’s cyclical reset.
And resets create repricing.
Where Opportunity May Be Greatest
Mark believes we are entering a resolution phase — the stage in the cycle when distressed assets transact, balance sheets clean up, and new bases for growth are established.
The window: 2026–2027.
Particularly compelling segments include:
Workforce housing
Well-located pre-1990s assets purchased at realistic bases
High-supply submarkets where patient capital can withstand short-term softness
In many cases, distress is not operational failure — it’s capital structure failure. Investors with flexible capital and conservative underwriting may find significant upside once stabilization occurs.
The Traveling HFC Factor
An additional dynamic impacting Texas markets is the Traveling Housing Finance Corporation (HFC) structure, which has provided property tax exemptions in exchange for affordable housing commitments.
While these deals offered meaningful short-term advantages, uncertainty around the law and its future modifications has introduced additional risk to certain properties.
Investors evaluating assets with HFC components must:
Understand financing limitations
Model tax implications conservatively
Monitor potential legislative changes
As with all cycles, complexity creates both risk and opportunity.
Positioning for the Next Cycle
One of the most important themes from the discussion was preparation.
Investors and operators who will benefit most over the next two years are those who:
Stay active and maintain broker relationships
Underwrite conservatively
Preserve liquidity
Secure strong property management
Think in terms of 5–10 year holds, not quick flips
In high-supply areas, patience will be critical. But markets with strong long-term job and population growth are unlikely to remain discounted forever.
Capital that waits for perfect clarity often misses the inflection point.
Crisis or Opportunity?
Cycles are uncomfortable — especially for those who bought at the top.
But as Mark emphasized, this is not systemic collapse. It’s repricing.
Distress is surfacing because assumptions changed. For disciplined investors, that shift may present one of the clearest entry windows since the post-GFC recovery.
The question is no longer whether opportunity will exist.
It’s who will be positioned to act when it does.
