The North Dakota-based REIT grew its portfolio to 175 properties and more than doubled net income year-over-year.

March 13, 2026

Sterling Multifamily Trust Posts Strong 2025 With Revenue Up 9.4 Percent

The North Dakota-based REIT grew its portfolio to 175 properties and more than doubled net income year-over-year.

Record Revenue and Surging Profitability

Sterling Real Estate Trust, operating as Sterling Multifamily Trust, closed out fiscal year 2025 with significant gains in revenue, net income, and portfolio size, according to its annual report filed with the Securities and Exchange Commission on March 11, 2026.

The Fargo-based real estate investment trust reported total property revenues of approximately $174.4 million for the year ended December 31, 2025, representing an increase of roughly $15 million or 9.4 percent compared to the prior year. Net income attributable to the trust more than doubled from approximately $7.3 million in 2024 to nearly $13.9 million in 2025, translating to earnings of $1.07 per share compared to $0.62 per share a year earlier.

A Growing Portfolio Across 12 States

The company’s portfolio stood at 175 properties located across 12 states as of year-end, encompassing approximately 12,295 apartment units and 1,159,000 square feet of leasable commercial space. The total carrying value of real estate investments, net of depreciation, reached approximately $902.4 million, up from $858 million at the end of 2024. Total assets approached $979 million.

Residential properties continued to drive the business, accounting for roughly 83.9 percent of the portfolio by cost and 87.9 percent of total revenues. Residential rental income climbed approximately 10.1 percent year-over-year, fueled by newly acquired properties contributing about $1.6 million in additional revenue, along with higher occupancy driven by increased lease renewals and general market rent increases. Residential occupancy improved to 93.0 percent from 92.5 percent at the end of 2024.

Commercial property revenues also rose, increasing approximately 5.1 percent due primarily to scheduled rent escalations and a slight uptick in occupancy to 90.4 percent.

Strategic Acquisitions and Dispositions

Sterling completed two multifamily purchases during 2025:

• Sterling Pointe — a 196-unit apartment complex in Grand Forks, North Dakota, acquired in July
• Falcon Apartments — a 144-unit property in North Branch, Minnesota, acquired in December

Together, these acquisitions represented approximately $46.3 million in net assets. The trust also disposed of four properties — one residential and three commercial — generating gains on sale totaling approximately $12.2 million.

Funds From Operations and Dividends

Funds from operations, a key performance metric for REITs, reached approximately $58.4 million for 2025, up from $49.3 million in 2024. Management emphasized this figure as evidence that the trust’s distribution policy remains sustainable.

Sterling declared dividends of $1.20 per common share for the full year, up from $1.15 in 2024. Total dividends declared to common shareholders amounted to roughly $15.6 million, of which about $7.2 million was paid in cash and $8.4 million was reinvested through the dividend reinvestment plan. The trust also declared approximately $22.4 million in distributions to limited partnership unit holders.

Cash flow from operations strengthened to approximately $54.8 million, up from $46.6 million in the prior year. The company noted it has funded 100 percent of dividends paid with operating cash flows.

Balance Sheet and Liquidity

Total mortgage notes payable stood at approximately $565.5 million, with a weighted average effective interest rate of 4.37 percent across 104 fixed-rate loans. Interest expense rose 9.8 percent to approximately $26.9 million, reflecting both higher overall debt levels and elevated rates. The trust maintained interest rate swaps with an aggregate notional amount of $123.1 million to manage variable rate exposure.

The trust’s liquidity position included approximately $7.8 million in unrestricted cash and $32 million in unused capacity on its lines of credit. During 2025, Sterling extended and expanded its credit facilities with Gate City Bank, bringing total available credit to $48.4 million.

Geographic Concentration and Risk

North Dakota properties accounted for approximately 53 percent of rental revenue, with Minnesota contributing about 35.6 percent. The Fargo-Moorhead metropolitan area alone housed 84 of the trust’s 175 properties. The trust acknowledged that economic weakness in these core regions could negatively impact financial performance.

Post-Year-End Developments

Several notable events followed the close of the fiscal year. In December 2025, the board approved an increase in the common share price from $24.00 to $25.50 per share, effective January 1, 2026, and raised the redemption price to $24.22. In February 2026, the trust acquired an additional residential property in Fargo for approximately $25.8 million. A property in Springfield, Missouri, also suffered fire damage in January 2026, though damage estimates were not yet available.

Sterling’s shares are not publicly traded, and there is no established market for its securities. As of March 2026, approximately 13.25 million common shares were outstanding, held by 1,237 shareholders, alongside roughly 19 million limited partnership units held by 526 partners.

The trust operates without direct employees, relying on its external advisor, Sterling Management LLC, which is wholly owned by Trustmark Enterprises — a company controlled in part by CEO Kenneth Regan and other trust officers. Looking ahead, Sterling has ongoing development projects in Rosemount, Minnesota, expected to complete in early 2028, and a joint venture in North Liberty, Iowa, anticipated to finish in the first quarter of 2027.