Insurance prices are growing faster for multifamily than any other commercial real estate asset class, with national operators reporting a 26% rise in insurance costs on average from 2022 to 2023 and some being hit with 300% and 400% increases.The rise is most acute in catastrophe-prone regions, especially Texas, Florida and Louisiana. But multifamily owners and operators everywhere are feeling the pain of high rates, limitations in coverage, hikes on deductibles and a shrinking private insurance market.That rapid ascent is expected to continue into 2024, and operators told Bisnow that spiraling costs could kill deals, reduce returns on investments, force foreclosures and discourage investors from even entering the multifamily space.
Source: ‘It Shut Down The Deal’: High Multifamily Insurance Rates Threaten Transactions, Strain Budgets
