How to Use a 1031 Exchange to Scale Your Multifamily Portfolio in Virginia

Bad underwriting is one of the biggest threats to multifamily investors in Virginia. Learn how to spot red flags, stress test assumptions, and model for today’s market realities.

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# Is 2026 a Good Time to Sell a Multifamily Property in Richmond, Virginia? For most owners, the honest answer is: it depends on your vintage and submarket, not the calendar. If you own newer Class A product in a strong-demand area, pricing is holding up well; if you own an older asset competing against a wave of new lease-up supply, you may be better served waiting for the pipeline to clear in 2027. ## Why timing isn't a single yes or no answer Richmond's 4 & 5 Star assets have absorbed roughly 80% of the market's net demand over the past year, and cap rates on that segment have compressed to the 6.0-6.2% range on completed deals. Meanwhile, 3-Star and 1 & 2-Star assets have traded in a much wider band — 5.3% to 7.4% depending on condition and vacancy at sale. If your property falls in that second category, "is now a good time" depends heavily on whether your specific asset can still command a premium in a market that's getting pickier. ## What's working in sellers' favor right now - **Dollar volume held up despite fewer deals.** Richmond saw $835 million in multifamily sales volume over the past year, right in line with the market's 10-year annual average of $679 million — even though only 46 transactions closed, well below the historical average of 58. Buyers are still writing large checks for the right assets. - **Population growth remains a genuine tailwind.** Richmond's population has grown 4.9% over the past five years, well ahead of the 3.2% national rate, and buyers are underwriting that long-term demand story even in a slower rent-growth environment. - **Private buyers are still active.** Private capital accounted for about 60% of transaction volume over the past year, ranging from a $2.07 million, 12-unit deal in South Richmond to a $119.75 million, 420-unit sale in Western Henrico County — there's real depth of buyer pool across every price point. ## What's working against sellers right now - **Rent growth has nearly stalled.** Asking rents rose just 0.9% over the past year, compared to the market's 10-year average of 3.7%. That directly limits how much NOI growth a buyer can underwrite into your price, which is the single biggest lever in any valuation. - **Vacancy is elevated and still rising.** At 8.3%, vacancy sits above the market's historical average of 7.4%, and is expected to climb further through the second half of 2026 before easing in 2027 as 4,700 units currently under construction get absorbed. - **New supply is concentrated in specific submarkets.** Downtown Richmond and Western Henrico County have delivered the bulk of new units since 2020 and continue to lead construction activity. If your property competes directly with that pipeline, buyers will discount for the lease-up competition regardless of your current occupancy. ## The real question to ask yourself It's not "is the Richmond market good right now" — it's "is my specific submarket and asset class in the group that's absorbing demand, or the group that's competing against it." Western Henrico County, Midlothian, and Downtown Richmond captured most of the market's net absorption this past year; several outlying counties and older-vintage 3-Star assets did not. ## The takeaway If your property is newer, well-located, and free of nearby lease-up competition, 2026 pricing is still rewarding sellers. If it's older, in a supply-heavy submarket, or under-rented, waiting for the pipeline to thin out in 2027 may put more money in your pocket — but only a real look at your comps will tell you which camp you're in. ## What to bring me If you're weighing a sale in Richmond, send me your address, unit count, and trailing 12-month operating statement. I'll show you exactly where your property lands against this year's actual closed comps before you make the call. #RichmondMultifamily #VirginiaCommercialRealEstate #ApartmentInvesting