As many multifamily developers navigate uneven market conditions across the nation, Wisconsin-based Continental Properties is leaning into a strategy it has followed for decades: balancing investments between slow-and-steady Midwest markets and faster-growing Sun Belt regions. That approach is paying off as oversupply challenges continue in parts of the Southeast and Southwest, while supply-constrained Midwestern markets post stronger rent growth.
“Instead of being a company that just puts all its chips in one place, we have tried very deliberately to spread out our investments to try to take advantage of positives that we saw in the Midwest and to try to take advantage of some of the growth in the Sun Belt markets, but we didn’t go all in in the Sun Belt,” says Jay Lybik, senior director of market research at Continental. “I think that that has allowed us to have a bit more balanced performance over the last couple of years.”
For Lybik, national apartment fundamentals don’t tell the whole story of what’s happening in multifamily today. He notes wide differences are being seen in terms of performance depending on the region or the market.
“It’s really important that investors and those in the industry make sure that they’re digging deeper looking at the regional level and they’re looking at the market level, because they’re going to see vastly different stories as they zoom in closer, and that to me is really the key right now in the sector,” he says.
Founded in 1979, Continental Properties has developed 142 apartment communities with over 39,000 homes across 20 states. It ranks No. 23 on this year’s National Multifamily Housing Council’s top developers list, starting nearly 2,100 units in 2025. The developer and owner credits its research-driven approach, disciplined execution, and focus on multifamily for its long-term performance.
That disciplined approach starts with data. Lybik says Continental continuously tracks market fundamentals across the country, monitoring supply pipelines, demand trends, and rent growth prospects in more than 127 markets. Some are markets where the firm is active, while others are monitored for future opportunities.
“We had record rent growth in 2021 and 2022, and so we have to be careful in terms of what we think is normalized, and we have to be careful in terms of looking at rent growth over the last five years because it’s going to be a little wonky,” he says. “We try really hard to make sure that our expectations of where we think rent growth can go are properly set and have some realistic parameters to them. One thing that we like to do is look at how markets performed in the five years before the pandemic because we feel like that was a time when the multifamily market was fairly well balanced, and you were seeing rent growth that wasn’t being heavily influenced by market conditions that the pandemic caused.”
Looking beyond the pandemic-era distortions also helps explain why the developer sees opportunity in the Midwest. Unlike many Sun Belt markets that experienced a wave of new construction, much of the Midwest maintained a healthier balance between supply and demand.
“I think pretty much the majority of the Midwest markets avoided the boom-and-bust cycle because there just wasn’t this huge influx of supply that flooded the market,” he shares. “When you look at Cincinnati, Detroit, Milwaukee, and Chicago, all of these markets have had their supply stay fairly stable. If supply went up, it was only slightly and didn’t get crazy. The regional economies have been growing very steadily and good demand has been producing outstanding rent growth in these markets.”
While some Midwestern markets continue to face slower population growth and outmigration challenges, Lybik says they are often overlooked despite posting solid rent growth.
As an example, he points to Chicago, which posted approximately 2.9% year-over-year rent growth in the second quarter.
“At the height, markets in Texas or Florida were doing significantly better, but now those markets are in the negatives. So you know 2.9% is definitely better than Austin right now, which is at negative 5% year-over-year rent growth,” Lybik says. “I think it’s that stability and lack of overbuilding that have allowed these markets to stay in equilibrium, and, as demand picked up a little bit, that gave a nice boost to the rent growth.”
For the Sun Belt, he notes he’s starting to see definite differences between markets, anticipating some getting back to equilibrium by the end of 2027 or early 2028. However, he says there are some markets that may continue to struggle into 2028.
To gauge which markets may recover sooner, Continental analyzes current supply pipelines, vacant inventory, and projected demand across the markets it tracks.
“There’s going to be some variation in terms of the recovery in these Sun Belt markets, so what we’re trying to do is really make sure we’re picking the markets that we think have the best chances to recover the earliest, and then give us the best opportunity to take advantage of the rent growth we think is going to be coming,” he says.
Lybik adds that while the nation has an overall shortage of housing and the industry needs to keep adding rental housing, developers need to be disciplined about where they build next.
“Developers need to, at this point, be very selective about where they want to build and when they’re going to build. We are dealing with a handful of markets that have severe oversupply conditions, and we need to get those markets back into equilibrium. I think the real key is to not keep having everyone pile into Dallas, into Atlanta, and into Austin,” he says. “Yes, we need housing, but we can’t overcome the housing shortage in the United States by making Dallas oversupplied. Let’s remember that we can go to markets where there’s not as much of a supply overhang and add the product that we need to meet that housing demand.”