Rhode Island multifamily market: Cautious start gives way to renewed optimism - by Derek Brazeau

As Rhode Island moves into the final quarter of 2025, the state’s multifamily market is demonstrating renewed momentum after a period of uncertainty earlier in the year. The first half of the year began with uncertainty as investors navigated a challenging environment marked by high construction costs, high interest rates and then tariffs. These factors, combined with uncertainty around rent growth projections, prompted many potential buyers and developers to take a wait-and-see approach. Yet despite this cautious start, the sector is showing signs of resilience, with several significant transactions closing recently and a positive outlook emerging for the remainder of the year and into 2026.

The multifamily market in Rhode Island, like many across the nation, felt the impact of broader economic and geopolitical factors in early 2025. Transaction activity slowed, with investors closely watching pricing trends and the direction of the market. Despite these challenges, Rhode Island’s multifamily fundamentals remained strong. The state’s urban and suburban markets continued to benefit from solid demand, driven by population growth, workforce mobility, and the enduring appeal of multifamily housing as a stable investment.

As the year progressed, transaction activity picked up, reflecting a market that is both resilient and adaptive. CoStar reports that in 2025, Rhode Island recorded 112 sold multifamily transactions, with an additional six properties under contract, or pending, indicating ongoing investor interest and confidence. These transactions ranged from small-scale 3 – 5-unit properties to large portfolios, demonstrating breadth and depth across the state.

Among the standout deals, 630 Smithfield Rd. in North Providence, a 240-unit property, sold for $52.5 million, $218,780 per unit, representing one of the largest Rhode Island single-property transactions of 2025. Equally significant was the Royal Crest portfolio in Warwick, located at 42 Cedar Pond Rd., which traded 492 units for $132.1 million, $268,538 per unit, marking the largest transaction of the year in terms of unit count. In Providence’s urban core, 530 Bdwy. changed hands as a 32-unit property for $5 million, or $156,250 per unit, highlighting continued investor interest in the city’s multifamily assets.

Based on CoStar data, the recorded median price per unit for transactions sold was $160,307, compared with $133,958 for listings or pending deals, illustrating strong growth even amid early-year market uncertainty.

The distribution of multifamily transactions highlights strong demand across Rhode Island’s urban and suburban markets. Providence led activity with 23 sales, reflecting the city’s appeal for investors targeting urban cores and rental demand near employment centers, educational institutions, and transit hubs. Pawtucket followed with 17 transactions.

Suburban markets also saw meaningful activity, with CoStar reporting Tiverton’s 103-unit property sale and significant deals in Warwick, Cranston, Lincoln, and North Providence. This geographic breadth illustrates the market’s resilience and the appeal of multifamily properties beyond the largest cities.

Looking ahead, several factors suggest that Rhode Island’s multifamily market is poised for renewed activity. Recent declines in interest rates are expected to facilitate financing and acquisition activity, encouraging investors who had paused earlier in the year to re-enter the market. Moderate supply growth, coupled with sustained rental demand, should support continued low vacancy rates and rent stability, creating favorable conditions for both developers and investors.

The record-setting transactions of 2025 highlight that Rhode Island remains a strong market for larger portfolio acquisitions, with investors confident in the long-term fundamentals of the state’s multifamily sector. As interest rates continue to drop, the market is expected to experience robust velocity in the coming months.

Derek Brazeau is a broker with Cushman & Wakefield|Hayes & Sherry Real Estate Services, Providence, RI.