Sterling Multifamily Trust Reports Strong Growth
The real estate trust saw increased rental income, strategic acquisitions, and sustained high occupancy rates, reinforcing its commitment to multifamily investments.
March 20, 2025
Expanding the Portfolio With a Focus on Multifamily
Sterling Multifamily Trust closed out the year with strong portfolio growth and higher rental income, reflecting its continued focus on multifamily properties. The trust’s real estate holdings expanded to 177 properties across 12 states, with nearly 12,000 apartment units and over 1.1 million square feet of commercial space. Rental income reached $159.3 million, a 10.9% increase over the prior year, driven largely by higher occupancy and rental rate adjustments.
The trust continued to refine its portfolio through targeted acquisitions and dispositions. Two multifamily properties were added during the year, aligning with its strategy of prioritizing stable, income-generating residential assets. Six residential and three commercial properties were sold, a move designed to strengthen overall returns by reallocating capital to higher-performing investments.
Occupancy levels remained high. Residential properties ended the year at 92.5% occupancy, up from 90.5% the previous year, while commercial properties held steady above 90%. Lease renewals and market rent adjustments helped drive revenue growth, with residential properties contributing 87.4% of total rental income.
Operations and Market Positioning
Sterling’s property management strategy played a key role in maintaining occupancy and rental performance. A majority of commercial leases included built-in rent increases, ensuring stable revenue growth over time. More than half of the portfolio’s commercial tenants signed leases with step-up rental clauses, providing annual rent escalations.
Geographic diversification helped balance portfolio risk. North Dakota remained the trust’s largest market, accounting for just over half of total rental income. Minnesota was the second-largest contributor, with properties in Texas, Nebraska, and Wisconsin providing additional diversification.
Capital improvements continued across the portfolio, with projects focused on:
- Building renovations
- Roof replacements
- Parking enhancements
These updates support long-term asset value while improving tenant retention.
Financial Performance and REIT Compliance
Sterling managed debt and expenses efficiently while navigating interest rate fluctuations. Interest costs rose slightly due to increased borrowings, but the trust maintained a structured repayment schedule, ending the year with $566.6 million in mortgage notes payable. Depreciation and amortization expenses increased in line with portfolio growth, while overall operating costs remained controlled.
The trust distributed $13.56 million in dividends over the year, maintaining a quarterly dividend rate of $0.2875 per share. Share repurchases and limited partnership unit redemptions continued under the trust’s existing redemption plan.
Positioned for Continued Growth
Sterling enters the new year with a clear strategy: expand its multifamily footprint, maintain high occupancy, and optimize portfolio performance. Its disciplined investment approach and focus on market-driven opportunities keep it well-positioned for future growth. With a strong mix of residential and commercial assets, the trust remains focused on delivering consistent returns to investors.
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