Why the school of thought among some developers that multifamily is the least volatile asset class compared to retail, industrial, office etc?
I was trying to think of the reason. Does the fact that in multi family, you have shorter leases compared to office , so its a better hedge against inflation as you reprice them annually or monthly play a part in this thinking? Any other thoughts? In terms of risk, if all else is the same (population growth, land/location appreciation, job growth,etc), how would you rank the risk level for the asset classes?

 Thank you!
[{"id": "dky8qct", "text": "People are going to need homes. It is one of the basic needs. You can even demand premium for location, good school district, upgrades to units.\n\nIndustry can move offshore, needs specialized suppliers. Retail is risky with online competition,  dependency on a high foot traffic etc. Offices can take a while to place a stable tenant. ", "replies": [{"id": "dky9933", "text": "&gt; It is one of the basic needs.\n\nGood point, with the middle class spending a third of their incomes on their homes,  I am personally pretty bullish on the rental/ownership market. Next I would rank industrial, office, retail and hotel in terms of risk. \n\nDo you remember how multifamily fared compared to other product types during the financial crisis? What do you think will happen to multifamily during a reccession? If construction comes to  a halt, will multi family also be affected along with other product types. ", "replies": [{"id": "dkyacw6", "text": "My experience as a renter during financial crisis was that rents did not go down, but they were offering incentives, like app fee waived, first month free, referral fee etc. (Now i am on investment side, so I understand a little better). During crisis time, you would have option to reduce your finance costs. If the multifamily new constructions slow down, existing complexes will be in demand-there will be a slow down in turning over empty ones though. ", "replies": [], "depth": 3}, {"id": "dl2od13", "text": "it's a shit link, but it's the first free one I found  \n\nhttp://www.crefc.org/CREFC/Resources/Compendium_of_Statistics/CMBS_Delinquencies_by_Property_Type.aspx  \n\nMF (the little green line) was the most affected asset class during the recession in terms of loan delinquency. it also rebounded the fastest and now has the lowest overall delinquency rate of the 4 main food groups. ", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "dkyn3e1", "text": "All above comments are correct in why multifamily is strong asset class, but don't touch on volatility specifically. \n\nMultifamily cash flow changes follow occupancy/vacancy changes very closely because individual tenants make up a small amount of overall revenue/cash flow. If a major anchor tenant in an office/retail property vacates, your cash flow can drop by half. There is huge risk in this because it's easier to fall under your debt service coverage ratios, and you will hear from your lender about loan covenants. I think that's what most investors refer to volatility. ", "replies": [{"id": "dkzgobp", "text": "Agreed. \n\nMore tenants... Shorter terms to deal with inflationary/expense issues quicker.", "replies": [], "depth": 2}], "depth": 1}]