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Multifamily operators are seeing their properties’ running costs continuing to grow, albeit at a slower rate than in years past according to a new report from real estate data firm Yardi Matrix.

The report analyzed data from over 22,000 properties that use the company’s software.

By region, the Southeast recorded the largest increase in costs, up 8.8 percent. Next were the West (7.3 percent), the Midwest (6.4 percent), the Southwest (6.0 percent) and the Northeast (4.7 percent). By market size, tertiary markets posted the largest increase (7.9 percent), followed by secondary markets (7.1 percent) and gateway markets (5.4 percent).

The Yardi Matrix researchers pinned most of the blame on general inflation – from wages to materials to services – every American business and consumer has dealt with over the last few years, but also noted rising insurance costs are taking their toll, particularly in more disaster-prone areas like the Southeast.

Tallahassee, Florida led the 129 markets broken out by Yardi Matrix in the study, with a 131.9 percent increase in insurance costs year-over-year. Forecasters predict an especially strong hurricane season this year.

While no Connecticut metros were broken out in the study, the closest market area to Connecticut, the combined Worcester and Springfield markets in Massachusetts, only saw a 6.7 percent annual increase in insurance costs, giving it one of the smallest increases nationwide.

Still, 2023 rent growth in many markets appears to be helping cushion hits to multifamily properties’ net operating income. Nationally, the difference between the average annual gross income per unit and expenses equaled a $463 increase in NOI, Yardi Matrix said. While many Sun Belt markets that are benefiting from a pandemic-era multifamily building boom whose products are starting to deliver, putting a lid on or driving down rents, Apartment List reports the median asking rent in Connecticut is up 3.8 percent year-over-year this month.