It’s a question more investors are starting to ask - out loud, in emails, and on calls:
Can you recession-proof a multifamily portfolio that’s already operating? The short answer? Not entirely.
The real answer? You can get pretty close, if you focus on the right things.
At Blue Lake Capital, we’ve never believed in chasing perfection. Instead, we focus on resilience: building and managing a portfolio that can weather economic storms, even if it can’t avoid them entirely. And in today’s environment, where inflation is sticky, rates are high, and consumer confidence is wobbly, that mindset is more important than ever.
Here’s how we’re thinking about recession resistance right now, and what we’re doing to reinforce the stability of the assets we already own:
1. Lean Hard Into Cash Flow
In a high-rate, uncertain economy, appreciation takes a back seat. And that’s okay.
We underwrite for cash flow first, and once we own an asset, we double down on optimizing it.
That means aggressively managing expenses, monitoring collections, offering lease renewal incentives when it makes sense, and ensuring occupancy stays healthy, even if it means adjusting rents to match current demand. This is not the moment to squeeze every last dollar out of tenants; it’s the moment to preserve revenue and keep the property performing.
2. Asset Management Is Everything
You can’t recession-proof anything if you’re managing it from a distance. We stay close to our assets, our property managers, and our on-site teams. We track KPIs obsessively, including occupancy, delinquency, turnover, rent growth, renewals, and even maintenance backlogs, because we don’t wait for problems to snowball before addressing them. As any experienced operator will tell you, that never goes well and is very difficult to reverse.
Hands-on, data-driven asset management is one of the most effective ways to protect an existing portfolio during uncertain times. And short of living onsite, we’re being heavily hands-on.
