In this market‑update video, Shafiq Hirani, MBA, CCIM, explains that small multifamily buildings (4‑7 units) in Washington, D.C. have lost about 7% of their per‑unit value over the past year, dropping from a median $206,750 to $191,894. He attributes the decline to three aligned forces: flat asking rents (≈$1,821/unit, +0.4%), rising vacancy (9.4% up from 8.7%), and higher buyer‑required yields (cap rates now ~7.2%‑7.5%). The impact is illustrated with a 6‑unit example losing roughly $89,000 in value. Hirani notes that new supply of small buildings is minimal (163 units under construction, –23.9%), so the pressure is priced in. He stresses that sub‑market performance varies widely (e.g., Brightwood Park +38.6% vs. Capitol Hill –20.9%). A tentative market bottom is suggested by a 2.9% year‑over‑year rise in the quality‑adjusted price index for Q2. Transaction activity is down (168 sales vs. 223 last year) with deals closing ~5.1% under ask and taking ~80 days. He advises owners to quickly estimate current value (unit count × $191,894), compare to debt, and, if a loan matures before 2028, obtain a broker opinion of value now. He also offers a pre‑refinance “NOI Navigator Checklist” for owners seeking a deeper walkthrough.
Chapters
Your DC apartment building is worth less than it was a year ago. Not a forecast, real closed sales. Small buildings in DC sold for about 7% less per unit than 12 months ago, and most owners have no idea by how much. If you own a 4 to 7 unit building, that gap is the difference between a clean refinance and a bad surprise at the closing table. I am Shafiq Hirani, MBA, CCIM. I am a real estate advisor, owner, and broker of small multifamily properties right here in DC. Every month I read this market for owners like you from the real numbers. If that is useful, subscribe so you don't miss these each month and drop your submarket in the comments because as you will see in a minute, your street matters more than the citywide number. 3 things. What actually happened to your building value this year? The one submarket fact that changes your number. And the single move to make before your next refinance. That last one is a one-line check you can run on your own building. Stay to the end and I will hand it to you. Let me show you. Start with the number that counts. My own closed comps put the median at $191,894 per unit. Down from $206,750. That is a real drop based on actual sales. Why did it fall? 3 forces pushed the same way. First, rent went flat. Asking rent sits at $1,821 per unit, up just 0.4% over the year. Concessions remain low at 1.1%, so owners aren't giving away free rent. Rents simply stopped climbing. Second, vacancy is rising. It moved to 9.4%, up from 8.7% a year ago. Small buildings lost ground on absorption, down 105 units across the segment. More empty units, softer income. Third, buyers now demand a higher yield. The cap rate on small D.C. buildings sits at 7.2%, Up from 7.1%. My own comps read a touch higher, closer to 7.5%. That sample is small, so treat it as a direction, not a precise figure. Either way, buyers are paying less for every dollar of income. Flat rent, rising vacancy, and a higher required yield. Put those together, and the same building is worth less. Here is what that looks like in dollars. Take a 6-unit building at today's median of $191,894 per unit. That is about $1,151,000. A year ago, at $206,750 per unit, it was about $1,240,500. Roughly $89,000 of value gone in a year. This is illustrative, not your exact building, but it is the median math you can run on your own. The part that should keep you calm: this pressure is priced in, not getting worse from new supply. Only 163 small units are under construction in DC, down 23.9%. Almost nobody is building 4 to 7 unit buildings right now. Yes, the wider DC market has 5,906 units under construction, Up 19%. But that is institutional product, big towers, not your building. Your competition is not a new wave of small buildings. That matters. DC is not one market. Over 3 years, Brightwood Park is up 38.6% per unit. Capitol Hill is down 20.9%. Trinidad is down 10.9%. Anacostia is down 5.1%. Your submarket, not the citywide number, decides your value. Know which one you are in. And there is one green shoot. The quality-adjusted price index for small buildings turned positive, up 2.9% year over year in the second quarter, after a down year in 2025. That looks like a tentative bottom. Not a recovery yet, but the fall has slowed. One more read on the buyers. Only 168 small buildings sold in the past year, down from 223. Deals are closing about 5.1% under asking and taking around 80 days. The active buyers are disciplined. You should be too. So what do you do with this? Run one check before you talk to any lender. Multiply your unit count by $191,894. That is your rough value at today's median. Compare it to what you owe. Then look at your refinance date. If your loan matures before 2028, book a broker opinion of value this month so you know your real number before the bank orders its own appraisal. Quick recap. Value is down about 7% per unit. Rent is flat, vacancy is up, and buyers want a 7.2% yield. So your building is worth less on the same income. But almost no new small supply is coming, and the second quarter looks like a tentative bottom. Your submarket decides your real number, and your refinance date decides your urgency. Owners who know their submarket and their refinance timing have the edge. Owners who guess get surprised. If you want the full pre-refinance walkthrough, grab my NOI Navigator Checklist. What is the NOI Navigator Checklist? It is the same list I run before I price a building. https://go.shafiqhirani.com/noinavigator.
