Des Moines Multifamily Investment Activity Rebounds as Capital Returns to the Market

Commercial real estate investment activity in Des Moines regained momentum in 2025 as buyers and sellers began to find pricing alignment after nearly two years of capital markets disruption. Transaction activity accelerated meaningfully during the year, with nearly $735 million in commercial real estate sales recorded through the first nine months alone, representing roughly 60% growth year over year and significantly exceeding pre-pandemic averages.

The improvement reflects a broader shift in market dynamics. Following the sharp interest rate increases of 2022 and 2023, asset pricing has largely reset and investors have become more comfortable underwriting deals at today’s financing environment. As a result, capital that had largely remained on the sidelines is beginning to reenter the market.

Importantly, the recovery is not uniform across all property types or investment strategies. Capital remains highly selective and is primarily flowing toward assets with stable income, clear pricing expectations, and manageable operational risk.

Multifamily has been the most active sector in the Des Moines market. Approximately $333 million in multifamily properties traded during the year, marking the strongest year-to-date volume recorded for the sector. Private investors and private equity groups drove the majority of the activity, with national operators pursuing scale through portfolio acquisitions while local buyers remained active in smaller transactions.

Institutional capital has been more selective, largely concentrating on newer suburban communities in areas such as West Des Moines, Urbandale, and Dallas County, where modern construction and strong household formation continue to support stable occupancy and rent growth.

Older urban properties have continued to trade at discounts, reflecting the additional capital expenditures and operational execution required to stabilize these assets. Investors remain willing to pursue these opportunities, but underwriting assumptions have become more conservative and pricing expectations reflect the additional risk.

Looking ahead, the Des Moines market appears positioned for a measured but constructive recovery. Pricing across stabilized multifamily assets has largely stabilized, and improving transaction activity suggests liquidity is gradually returning to the market. While significant appreciation is unlikely in the near term given the current interest rate environment, well-located assets with strong operations are increasingly attracting investor interest.

Overall, the return of disciplined capital to the Des Moines multifamily market is an encouraging signal. Investors remain focused on fundamentals and operational performance, but the improvement in transaction activity suggests confidence in the market’s long-term outlook is strengthening.

(Sources: Costar)