Chicago Tops the List of Ten Cities Prime for Multifamily Investment

As multifamily investors navigate a market filled with oversupply in some metros and evolving opportunities in others, carefully evaluating the most appropriate markets and submarkets for your investment strategy becomes essential. Crexi and PwC have identified ten cities that stand out as prime locations for multifamily real estate investment in 2025, offering strong fundamentals and growth potential.

Here’s a detailed look at the top ten list compiled by CREXI and PwC, and what factors may make these cities attractive to investors.

The top cities highlighted:

1. Chicago

Chicago tops the list, boasting nearly 2.7 million residents and a diverse economy spanning education, healthcare, and finance. The Windy City offers competitive pricing compared to other major metros like New York or San Francisco. With a median rent of $2,212 for a one-bedroom apartment, investors can tap into a large and varied tenant base. Key investment metrics include a sales price of $188 per square foot, an asking cap rate of 7.1%, and an average of 111 days on market.

2. San Diego

San Diego stands out for its limited apartment supply and high rental demand. With a population exceeding 1.4 million, the city’s economy thrives on defense, tourism, healthcare, and technology. Median rents for one-bedroom units are $2,448, reflecting a robust rental market supported by geographic and zoning constraints. Investment metrics reveal a sales price of $553 per square foot, an asking cap rate of 4.5%, and an average of 130 days on market.

3. Columbus

Columbus, Ohio’s capital and largest city, offers affordability and growth potential. With more than 900,000 residents, the city’s median rent is $1,200, supported by industries such as education, healthcare, finance, and technology. Infrastructure revitalization projects and Ohio State University’s proximity attract a steady stream of tenants. Investment figures include $155 per square foot in sales comps, a 6.0% cap rate, and 97 days on market.

4. Nashville

Nashville continues to thrive beyond its music scene. With a population of over 2 million, the city is witnessing a surge of companies relocating or expanding into the area. A median rent of $1,630 for a one-bedroom apartment positions Nashville as a relatively affordable option for young professionals. Urban development and infrastructure projects further enhance property desirability. Sales comps average $338 per square foot, with a 5.2% cap rate and 91 days on market.

5. Raleigh

Raleigh’s reputation as a tech hub is well-earned, with industries like technology, life sciences, and research driving its economy. The city’s population exceeds 470,000, with a low unemployment rate of 2.6%. A median one-bedroom rent of $1,200 makes it attractive to renters, while investors benefit from sales comps of $304 per square foot, a cap rate of 5.4%, and 116 days on market.

6. Boston

Boston combines its historic charm with a booming economy centered on high-tech, biotech, healthcare, and education. Home to prestigious institutions like M.I.T. and Harvard, the city’s rental market boasts high occupancy rates and a median one-bedroom rent of $3,731. Recent initiatives, including a $110 million investment in new multifamily housing, aim to address housing shortages. Investment metrics include $665 per square foot in sales comps, a 6.0% cap rate, and 70 days on market.

7. Dallas

Dallas offers a business-friendly environment and a rapidly growing population. With a median one-bedroom rent of $2,162, the city maintains an affordable cost of living relative to other major markets. Dallas’ strong employment growth continues to attract multifamily investors. Investment figures include $269 per square foot in sales comps, a cap rate of 5.4%, and 140 days on market.

8. San Jose

San Jose’s position as a tech powerhouse is underscored by the growing demand for apartments. With a median one-bedroom rent of $2,630 and a low vacancy rate of about 3.5%, the city remains attractive to professionals in search of housing. Investors benefit from sales comps of $526 per square foot, a cap rate of 5.0%, and 98 days on market.

9. Philadelphia

Philadelphia’s economy, fueled by education, healthcare, and technology, continues to expand. With a median one-bedroom rent of $1,928, the city offers competitive rental yields and low vacancy rates. Infrastructure improvements and steady job growth further enhance its appeal. Investment metrics include $213 per square foot in sales comps, a 7.4% cap rate, and 96 days on market.

10. Minneapolis/St. Paul

The Twin Cities round out the list with stable economic growth expected over the next decade. Major industries include healthcare, finance, and technology. Median one-bedroom rents average $1,762, with moderate vacancy rates providing a steady income stream for investors. Sales comps average $112 per square foot, with a 6.5% cap rate and 132 days on market.

Conclusion

These ten cities exemplify diverse opportunities for multifamily investment in 2025. From Chicago’s competitive pricing to San Diego’s high demand and Boston’s resilient rental market, each location offers unique advantages for savvy investors. Whether you’re expanding your portfolio or entering the multifamily market, these cities provide a strong foundation for success.