Nikita Rao

Nuveen’s housing platform executed $4 billion in transactions in 2021. In particular, the U.S. Cities Multifamily Strategy Fund that Rao manages executed approximately $1 billion in investments, more than doubling the size of the fund.

“Overall, the fund outperformed the benchmark due to our strategy of focusing on providing safe and quality options for middle-income renters and market selection,” Rao said. “We were able to build a strong portfolio that is well-diversified, which will have durable cash flows through cycles.”

Rao is a former senior vice president at Federal Capital Partners (FCP) with more than a decade of experience in multifamily asset management. She said vacancies across most cities remain near historic lows as demand outpaces supply.

“No event in modern history has impacted the real estate market as dramatically as the COVID pandemic,” she said. That’s not necessarily a bad thing, as the housing sector remains a top performer driven by reliable cash flows, Rao said. “The ability for many to work remotely changed the focus of where people wanted to live, and we saw increased demand for multifamily units in the suburbs and in locations with a higher quality of life,” Rao said.

In 2021, client portfolios benefited from both income and capital appreciation. Looking forward, investor portfolios under-allocated to inflation-hedging assets have felt the pinch, according to Rao. “We will continue to see capital flows into multifamily as a hedge against inflation and rising interest rates,” Rao said. “However, in the short term, we will see a bit of pullback in particular from levered buyers until there is some stability in the overall economy.”

As for the D.C. area, Rao believes that it will continue to benefit as the local economy diversifies with the influx of employers from biotechnology, cloud computing and medical.