There Is a Right and a Wrong Way to Centralize Multifamily Operations

• Central command: Multifamily operators are looking for ways to save money. Centralization is a great option, but only if it is done right.

• Moral Compass: Zillow is facing a fresh lawsuit brought by Compass over an email Zillow sent to brokers that could be seen as anticompetitive.

• Mortgage backed against a wall: CMBS delinquencies have hit an all time high spurring some to worry that we are hitting the dreaded “wall of maturities.”

• Join the live webinar: Multifamily operators are using automation to streamline management and improve the resident experience. Sign up

Multifamily

There Is a Right and a Wrong Way to Centralize Multifamily Operations

The multifamily market is entering a new era. For years, it rode a wave of strong fundamentals: a growing economy, a shortage of new housing, and a home-buying market too expensive for many Americans. But the tide is turning. Rent growth has cooled in cities that finally managed to add supply, while stagnant wages and inflation are squeezing margins. Operators now face a familiar question with a new urgency—how to stay profitable when both income and expenses are moving in the wrong direction.

One answer gaining traction is centralization. By consolidating operations—leasing, security, maintenance—across multiple properties, owners can stretch resources further. But the shift demands precision. As Elevate’s Lisa Yeh cautioned during a Propmodo webinar, “There are certain things you can’t take all the way down to zero.” Slashing costs too deeply can damage building operations and erode the resident experience, which ultimately undermines revenue. Instead, smart operators are redistributing workloads, automating low-value tasks, and giving on-site teams more time to focus on residents.

The result is a new model for multifamily management. One that is leaner, data-driven, and increasingly tech-enabled. Centralized teams handle paperwork, remote security systems respond to incidents in real time, and maintenance staff are freed from administrative drags. It’s not about doing more with less, it’s about doing better with what’s left.

Overheard

Compass Accuses Zillow of Monopolistic Control in New Legal Battle

Zillow and Compass are back in court. The ongoing feud between the listing portal giant and the high-end brokerage has escalated after Compass sued Zillow, alleging that the company’s policies amount to anticompetitive behavior. The lawsuit stems from Zillow’s decision to limit how listings are shared and to require more exclusive access through its platform, changes Compass claims effectively punish agents who market properties elsewhere. The conflict has grown personal, with Compass pointing to internal Zillow communications that it says reveal intent to dominate the digital listings space.

Compass’s latest filing highlights a particularly damaging piece of evidence: an internal Zillow email that, according to the brokerage, demonstrates the company’s “monopoly power.” In legal terms, Compass argues that the email shows Zillow knew its listing rules would lock agents and sellers into its ecosystem, potentially violating antitrust laws. It’s a rare attempt to use a platform’s own enforcement correspondence as proof of monopolistic intent. Zillow has pushed back hard, saying its policy changes are meant to ensure data consistency and transparency, not to exclude competitors.

If the court takes Compass’s argument seriously, the case could set a major precedent for how listing platforms operate. A ruling in Compass’s favor could redefine what counts as exclusionary conduct in real estate, forcing listing portals to rethink how they enforce access and distribution policies. It could also usher in a new era of broker-portal dynamics, where agents demand more transparency and autonomy in how they conduct their listings. Whether or not Compass wins, the message is clear—real estate’s digital gatekeepers are under more scrutiny than ever.

The CRE Crisis Isn’t Coming, It’s Here

The latest data from Trepp show the delinquency rate for office-backed CMBS loans has surged to 11.8%, topping the peak seen during the financial crisis—a clear sign of distress in the office sector. For multifamily CMBS, the rate has climbed to 7.1%, the worst mark since late 2015, as even rental housing is feeling capital-market pressure.

The magnitude of the office crunch is striking. A jump from just 1.8% in October 2022 to 11.8% today reflects dramatic shifts: remote work stickiness, overbuilt space, and ballooning maturities. For lenders, investors and owners this marks a turning point: what was once viewed as manageable is now baked into portfolios as measurable risk.

Real estate investors need to consider two things. One, valuations must adjust further in order to the reality to be fully priced in. Many assets will trade on distress, not expectation of renovation or recovery. Two, underwriting criteria for CRE debt will need to tighten—not just around property fundamentals but around borrower structure and exit strategies. When even the “safer” multifamily space shows signs of strain, the margin for error in leverage models narrows sharply.

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Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

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