MARKETING
Balancing Concessions & Profitability
BY NICOLE STEMO
In today’ s multifamily market, balancing concessions and profitability has become one of the most complex challenges operators face. Across many regions, concessions are rising, market rents are softening, and renewal increases are flat to minimal. When heavy new supply and aggressive lease-up incentives enter the picture, stabilized communities can quickly feel pressured to compete with offers that simply don’ t align with their operating budgets.
The reality is this: concessions are often unavoidable. But profitability doesn’ t have to be. The difference lies in how intentionally and strategically concessions are deployed.
BE PROACTIVE, NOT REACTIVE
Success in a concession-heavy market requires a proactive mindset. Operators must move quickly, analyze performance often, and remain willing to pivot. If leasing velocity isn’ t meeting expectations, adjustments should be made before performance slips further. Waiting too long can compound losses through vacancy, higher turn costs, and even deeper concessions down the road.
The good news? Protecting NOI is still possible— even in this environment— when incentives are used with purpose rather than desperation.
USE CONCESSIONS STRATEGICALLY, NOT BROADLY
Concessions are most effective when they are targeted, not applied across the board. Blanket specials across all units often erode revenue unnecessarily and limit flexibility later.
Instead:
• Focus incentives on lower-performing unit types or specific units, rather than the entire list of available units.
• Analyze lagging trends such as stale inventory, secondfloor locations, or floor plans that lease more slowly, and tailor specials to address those challenges.
28 | TRENDS FEBRUARY 2026 www. aamdhq. org