How to Read a Multifamily Rent Roll When National Rents Are Down 0.4% but Coastal Markets Are Up 9% in 2026

National apartment rents sat roughly 0.4% below year-earlier levels in February 2026, even as occupancy climbed to around 94.8%. The gap between what the broker's market survey claims a unit is worth and what the rent roll shows a tenant pays sits at the center of every multifamily deal you underwrite this year. This checklist walks through loss-to-lease, trade-out, and lease expiration concentration, three rent roll metrics telling you whether your rent growth assumptions rest on real leases or on a broker's optimism.

What the Rent Roll Tells You the T-12 Does Not

The T-12 shows you what the property earned over the past year. The rent roll shows you what each unit rents for today, when the lease ends, and how the current lease compares to the one before it. Two properties with identical trailing NOI carry different risk profiles if one has 35% of leases expiring in a single winter month and the other spreads expirations evenly across the year.

Underwriting from the income statement alone misses this. Your rent roll analysis runs unit by unit, and it answers three questions the T-12 cannot: how much room exists between in-place rent and market rent, whether new leases are trading up or down against the leases they replace, and how concentrated your renewal risk is in any given month.

Step 1: Calculate Loss-to-Lease Before You Trust the Broker's Market Rent

Loss-to-lease measures the gap between what a unit rents for at market and what the current tenant pays.

Loss-to-Lease = (Market Rent / In-Place Rent) - 1

Example: a 120-unit property carries an average in-place rent of $1,450. The broker's offering memorandum lists market rent at $1,600 based on three comps down the street.

Loss-to-Lease = ($1,600 / $1,450) - 1 = 10.3%

A 10.3% gap looks attractive on a broker flyer. It is not a number you underwrite as a day-one jump. Loss-to-lease closes only as leases turn over, and turnover on a stabilized property runs 40% to 55% per year. At this pace, the full gap takes two to three years to capture, and only if every renewing and new tenant pays the higher rate.

Start your pro forma from the rent roll's actual in-place rents, not the market rent line on the offering memorandum. The conservative move is to set your year-one loss-to-lease capture at zero and let rent growth come from verified trade-out data, covered next. Many operators instead underwrite partial capture, 25% to 50% in year one, when their own trade-out data supports it. Either way, treat the broker's market rent survey as a ceiling to sanity-check your model against, not an input you build the model around.

Step 2: Read the Trade-Out Line, Not Only the Average Rent

Trade-out measures whether a new lease on a unit rents above or below the lease it replaced.

Trade-Out % = (New Lease Rent / Expiring Lease Rent) - 1

Renewals and new leases behave differently, and blending them into one average hides the story. Renewals have accounted for roughly half to over 55% of leasing activity nationally in recent years, and renewal trade-out consistently outperforms new-lease trade-out because a renewing tenant avoids moving costs and a landlord avoids vacancy loss. New-lease trade-out carries the real risk: in oversupplied submarkets, the incoming tenant signs below the outgoing tenant's rent, producing negative trade-out on the unit.

Regional data from February 2026 shows how wide this split runs. Coastal tech markets including San Francisco, San Jose, and New York posted rent growth of 4.5% to 9% year over year, while South and West markets kept posting annual declines even as national occupancy improved. Rent growth is a market-level number, not the same as trade-out, which is what a unit realizes when the lease turns. New-lease trade-out in oversupplied Sun Belt submarkets has run negative 3% to negative 5%, while coastal recovery markets have seen positive trade-out on turned units, though not uniformly at the headline rent growth rate. A rent roll from a Sun Belt property acquired in 2022 will likely show new leases signing below the leases they replace on units which turned over in the past 18 months.

Pull the trade-out percentage for every unit which turned over in the trailing 12 months, separated into renewal trade-out and new-lease trade-out. Do not average the two together. A portfolio blended average of positive 2% masks a renewal trade-out of positive 6% sitting next to a new-lease trade-out of negative 4%. The second number is what shows you what a vacant unit leases for today.

Step 3: Map Lease Expiration Concentration and Rollover Risk

Sum the lease expirations by month across the full rent roll, then calculate what share of total units expires in each month. A well-managed property keeps every month under roughly 15% of annual expirations. A property with 30% or more of its leases expiring in November and December carries concentrated rollover risk, since vacancy duration is materially longer in winter months, particularly in cold-weather markets.

Turnover cost adds up fast when concentration hits at the wrong time of year. Industry benchmarks from the National Apartment Association put turnover cost, covering cleaning, repairs, marketing, and lost rent during the vacancy period, in the range of $1,000 to $5,000 per unit depending on the scope of work. One illustrative example: a 225-unit community running a 40% annual turnover rate incurred roughly $162,000 in yearly turnover expense, a figure specific to this property, not an industry benchmark. Reducing turnover by even a handful of units per year moves real dollars to the bottom line.

Flag any month where lease expirations exceed 15% of total units, then cross-reference against the local leasing season. In cold-weather markets, a concentration of expirations in December or January signals higher vacancy loss and turnover cost than the same concentration would produce in a market with a mild winter. Build a remediation plan into your first-year operating budget: offer 13 or 15-month lease terms on renewals in the concentrated months to shift future expirations into stronger leasing periods.

Step 4: Do Not Double-Count Rent Growth

The most common rent roll modeling error stacks two or three growth assumptions on top of each other without realizing it. A sponsor projects loss-to-lease capture in year one, then also applies a separate market rent growth rate to the same units, then layers in a renovation premium on top of both. The result is an effective gross income projection no operating history supports.

Keep one growth path per unit. Start with the actual in-place rent from the rent roll. Apply your verified trade-out percentage to model turnover in each future year. Apply your loss-to-lease capture only to the units turning over in a given year, not to the whole rent roll at once. If you plan a renovation premium, apply it only after the unit turns and only on top of the trade-out rent, not on top of a separately inflated market rent figure. Run the math once, in one place, and check it against the trade-out data you already pulled in Step 2.

How MultiVest Engine Handles Rent Roll Analysis

Running loss-to-lease, trade-out, and expiration concentration calculations by hand across a 150 or 200-unit rent roll takes an afternoon, and doing it wrong is easy when the source file arrives as a scanned PDF with inconsistent column headers. MultiVest Engine's AI parsing extracts every unit, lease start and end date, and current rent from the seller's rent roll file directly into a structured table, no manual data entry required.

From there, the platform calculates loss-to-lease and trade-out automatically at the unit level and flags lease expiration concentration by month, so you see a rollover risk warning before you build a single rent growth assumption. Every adjustment you make, whether it is a revised trade-out rate or a renovation premium, flows straight into the Scenario Builder, where you see the effect on NOI, DSCR, and IRR without rebuilding a spreadsheet model from scratch for each deal.

Operators reviewing multiple rent rolls a week need this step to run in minutes, not hours. The deals losing money are rarely the ones with an obvious problem. They are the ones where a broker's market rent survey sat untested in the model until closing.

The Bottom Line

The rent roll, not the broker's market rent survey, tells you what a property earns and what it will earn under your ownership. Calculate loss-to-lease against verified in-place rents, separate renewal trade-out from new-lease trade-out, map your expiration concentration by month, and apply rent growth once, in one place, tied to data proven at the closing table. Do this before you submit a letter of intent, and you underwrite the property in front of you, not the one the offering memorandum describes.

References

1. RealPage Analytics: February 2026 Data Update
2. Tactica RES: Underwriting Multifamily Loss-to-Lease
3. Tactica RES: Multifamily Rent Roll, Analyzing Move-In and Lease Expiration Dates
4. Wall Street Prep: Loss to Lease (LTL), Formula and Calculator
5. National Apartment Association: Crunching the Numbers on Turnover Costs