Multifamily Syndication Returns: Our Tape vs the Index

When a prospective LP asks me what returns they should expect, I don't give them an industry average. I give them our tape.

What are multifamily syndication returns? They are the combined cash distributions and capital appreciation limited partners receive from a pooled apartment investment, usually reported as IRR (internal rate of return) and cash-on-cash yield net of sponsor fees, typically over a 3 to 7 year hold and realized at refinance or sale.

Across 10 RoAnVi projects - 3 value-add in operation, 7 ground-up in various phases - our blended IRR is roughly 18.9%. The conversation about LP payouts gets abstract fast, so here is the concrete version: our lowest closed deal printed 14.5% net IRR, our highest projected deal pencils to 23.5%, and the average falls inside the range institutional LPs see from top-quartile private real estate managers. I am going to show you the tape by project type, with benchmarks and where we could still be wrong.

Why multifamily syndication returns vary by project type

The single biggest driver of IRR in an LA deal is not the market - it is the project type. Value-add deals reposition existing rent rolls; ground-up deals create basis. Those are different risk profiles, different timelines, and different return distributions. Lumping them into one average is what every competitor blog does. It is why "expected returns of 15-20%" reads as marketing and not operating data.

Institutional benchmarks confirm the spread. The NCREIF ODCE Index - the standard private real estate benchmark covering open-end core apartment and diversified funds - has delivered roughly 6-8% net IRR across recent ten-year windows. Core private multifamily sits lower. The FTSE Nareit All Equity REITs Index returned about 11.5% annualized over the trailing ten years as of year-end 2025. Both are liquid, diversified, and unlevered at the LP level compared to a single-sponsor LP investment. A private multifamily syndication targets a premium over those benchmarks because you trade liquidity, diversification, and daily pricing for operator execution and financing structure.

SB 79 (effective July 1, 2026) and SB 684 shift ground-up math meaningfully on transit-adjacent and small-lot parcels. We wrote about SB 79 here and unpack how a syndication deal is structured here. This post is about what those deals actually returned.

The RoAnVi tape: 10 projects, two buckets

Here is the portfolio breakdown. Completed deals show realized IRR. In-construction and planning deals show projected IRR based on current bids, leasing comps, and the debt stack we have locked. Projected numbers are not guarantees.

Value-add (3 projects, $19.7M total):

• Koreatown Apartments - 18 units, $6.8M, completed 2025. 17.1% IRR realized. 34% average rent increase post-reposition.
• Silver Lake Duplex Portfolio - 8 units, $3.4M, completed 2024. 14.5% IRR realized. 7.2% cash-on-cash.
• DTLA Micro-Units - 40 units, $9.5M adaptive reuse, currently leasing. 22.3% IRR projected.

Ground-up (7 projects, $77.3M total):

• Magnolia Gardens - 24 units, $8.2M, completed 2025. 18.5% IRR.
• Vermont Avenue Lofts - 36 units, $12.4M, in construction. 21.2% IRR projected. SB 684 density bonus.
• Highland Park Townhomes - 12 units, $5.1M, in construction. 16.8% IRR projected. For-sale exit.
• Eagle Rock Residences - 20 units, $7.9M, planning. 20.1% IRR projected.
• Glendale Mixed-Use - 48 units, $18.7M, entitled. 19.4% IRR projected.
• Pasadena Senior Living - 32 units, $14.2M, in construction. 15.8% IRR projected.
• SFV Development Site - 28 units, $10.8M, planning. 23.5% IRR projected. SB 79 play.

The value-add band runs 14.5% to 22.3%. The ground-up band runs 15.8% to 23.5%. Blended across all 10 projects, we are at roughly 18.9% IRR. Our active LA pipeline lists the deals currently open to accredited LPs.

The numbers against the index

This is the table most sponsors will not publish. Benchmark figures are pulled from public NCREIF and Nareit reporting through year-end 2025; cap-rate context is the CBRE U.S. Cap Rate Survey.

Two honest caveats on the table. First, NCREIF is net of fund-level fees but reports unlevered core returns; a levered value-add strategy should sit above it by definition. Second, our 18.9% blend is a portfolio average, not a guarantee on any future deal. The range matters more than the average.

The CBRE H2 2024 cap rate survey put LA multifamily value-add cap rates in the 5.5% to 6.25% band, with core stabilized tighter. That is the spread we underwrite against. If cap rates compress 50 bps on exit, our IRR projections go up; if they widen 50 bps, the ground-up deals tighten and a couple of the value-add exits push out 12 to 18 months. We model both.

What could go wrong

Four risks I underwrite against before I send a deal memo.

Rent growth stalls. Our value-add thesis assumes market-rate LA 1BR rents hold in the $2,400 to $2,900 band over a 3-year hold. If rents are flat for 24 months, our value-add IRRs compress by roughly 200 to 400 bps. It does not turn into a loss, but 17.1% becomes 13% to 14%.

Construction costs move. Ground-up is exposed to hard-cost inflation and labor availability. Our 2026 GC bids are coming in $350 to $500 per sqft all-in depending on product type. A 10% hard-cost overrun on Vermont Avenue Lofts cuts the projected IRR by about 250 bps.

Lease-up is slower than projected. The DTLA Micro-Units and Vermont Avenue Lofts both depend on 9 to 12 month lease-up curves. Push that to 18 months and the NOI stabilization year slides, which is most of what hurts IRR on ground-up.

Deal-level liquidity. A syndication LP interest is not tradeable. A 5-year target hold can become 7 if the exit market is wrong, and that extension shaves IRR even when the dollar profit is preserved. That is the liquidity premium NCREIF and Nareit do not charge. We do.

The takeaway

The spread between index multifamily performance and ours is not alpha - it is a risk premium on illiquidity, single-asset exposure, and operator execution. The IRR number that matters is not the portfolio average; it is the realistic range for the specific deal you are being offered, with clearly disclosed assumptions on rent growth, cap rate exit, and cost. Ask every sponsor for that range, in writing, before you wire.

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Frequently asked questions

What is a good IRR for a multifamily syndication? Value-add targets typically run 14-20% net IRR to LPs, and ground-up development targets 16-24%. "Good" depends on the risk: a 15% IRR on a stabilized core-plus deal is strong; a 15% IRR on a ground-up with entitlement risk is thin. Always compare the IRR to the specific deal's risk profile, not to a blanket benchmark.

Are syndication returns guaranteed? No. All syndication returns are projections, not guarantees. The LP's downside is capped at the capital invested (in most structures), but IRR and cash-on-cash figures depend on rent growth, exit cap rates, construction costs, and lease-up. Any sponsor who tells you returns are guaranteed is either misinformed or misrepresenting the deal. Read the PPM.

How do multifamily returns compare to REITs? Public apartment REITs in the FTSE Nareit index have delivered roughly 6-12% total annual return over recent rolling periods, with daily liquidity and broad diversification. Private multifamily syndications target 14-20%+ net IRR with no daily liquidity and concentrated single-asset exposure. The private premium is the illiquidity and operator-execution compensation, not free alpha.

What fees do syndication sponsors take? Typical LA syndication fee stacks include a 1-2% acquisition fee, a 1-2% annual asset management fee, sometimes a 3-5% construction management fee on ground-up, and a promote of 20-30% of profits above a preferred return (usually 7-9%). All IRR figures quoted to LPs should be net of these fees. Ask for the gross-to-net waterfall.

What happens if a deal underperforms? LPs receive distributions in order of the waterfall: return of capital, preferred return, then promote. If NOI or exit proceeds fall short, the preferred return accrues but may not be paid currently, and the promote does not kick in until LPs are made whole. In a severe downside, LP capital can be partially or fully impaired. Underperformance reduces IRR; it does not automatically create loss, but it can.

About the author

Ravi Sharma is the principal of RoAnVi LLC, an LA multifamily syndication firm focused on value-add and ground-up development in Koreatown, Highland Park, Eagle Rock, Silver Lake, and the San Fernando Valley. 10 projects under management across value-add and ground-up, with $97M in total project cost.

Sources

• NCREIF ODCE Index - institutional private real estate benchmark - open-end diversified core equity index used as the standard benchmark for private core real estate performance.
• FTSE Nareit All Equity REITs Index and Apartment Sub-Index - public REIT total-return data used to contrast liquid real estate exposure with private syndication returns.
• CBRE U.S. Cap Rate Survey H2 2024 - semi-annual institutional survey of multifamily and commercial cap rates by market and asset class.
• Nareit historical REIT return data - long-run annualized return series for public equity REITs, used for the 10-year context figure.