Construction Surge Lifts 2025–2027 Multifamily Supply Outlook

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Good morning. As construction activity outpaces earlier expectations, multifamily is now on track to deliver significantly more units over the next two years than previously forecast.

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Market Snapshot

Growth Outlook

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• Inbox impact: Precision-targeted emails and detailed listings—not flashy social media—are what actually drive CRE engagement and conversions.

• Transaction rebound: A surge in September deals drove U.S. commercial real estate investment volume up 16% in Q3.

• Cautious path: Economists expect slow but steady growth in 2026, with low recession risk, stable inflation, and modest job gains. 

• Extend and pretend: CRE loan mods hit $11.2B in Q3, led by hotels and offices, with loans over $100M making up the bulk of activity.  

• Asset review: Western Alliance says it’s found no new issues in its loan book after reviewing large notes tied to failed borrowers. 

• Asia allocation: KKR says global investors are steadily shifting capital to Asia, especially Japan and India, as the dollar weakens. 

• Hiring trends: Job opening rates are highest in smaller states like West Virginia and Maine, where tight labor pools give job seekers more leverage. 

• Refi revival: Refinance applications surged 81% YoY as mortgage rates dropped to 6.37%, the lowest in a month.

• Stable climbers: Just 9 major U.S. apartment markets have maintained uninterrupted annual rent growth over the past 5 years.

• Leasing abuse: Petra Management will pay $700K and overhaul its leasing practices after D.C. found it illegally exploited housing voucher laws to charge inflated rents.

• Failure to launch: A generational shift is reshaping the rental market as more young adults finally leave their parents' homes.

• Asset unraveled: A 292-unit Cincinnati apartment is up for sale after foreclosure, marking another setback in the collapse of City Club Apartments' portfolio.

• Paper profits: Pimco netted $2B from Meta’s $27B data center debt deal, fueled by investor appetite for AI infrastructure.

• Leased & loaded: Sitex Group fully leased its upgraded 130,000-SF Edison complex, turning it into a modern industrial hub.

• Mile high move: Harrison Properties bought 1.6M SF of Denver warehouses from Prologis in Colorado’s biggest industrial deal since 2022.

• Vision delivered: McCord secured Eli Lilly’s $6.5B facility for Houston’s Generation Park by investing early in infrastructure and biotech workforce training.

• Industrial exit: BBX sold its industrial arm and team to FRP Holdings for $33.5M as it shifts focus and braces for economic uncertainty.

• Beverly's bet: The $10B One Beverly Hills project targets ultra-wealthy buyers and luxury retailers, but its success hinges on whether exclusivity can still drive foot traffic.

• Market return: Atlantic City’s first full-service grocery store in 20+ years will open through a $20M state-backed revamp of Save A Lot. 

• Value crash: Palisades Center’s loan resolved with a $231M loss after years of declining revenue, vacancies, and a 78% drop in value.

• Court shortage: Pickleball’s rise clashes with Manhattan’s tight real estate market, as space, ceiling height, and cost limit where new courts can open.

• Infill opportunity: As land grows scarce, developers are transforming struggling South Florida malls into multi-billion-dollar mixed-use hubs. 

• Houston boom: Despite near-record rents and limited space, national retailers are still expanding in Houston’s retail market.

• Flexible growth: Coworking continues to gain traction in the U.S. office market, with flexible space expanding its overall share. 

• Pension pullback: Pension funds are selling NYC office buildings at losses as they rethink real estate’s role in their portfolios. 

• Bay bounceback: San Francisco leads U.S. office visit growth, hinting at a broader California recovery driven by AI and RTO mandates. 

• Refi of the day: Brookfield secured a $1.3B refi for its revamped 660 Fifth Avenue, signaling lender confidence in NYC’s Plaza District.

• Lincoln revival: DivcoWest unveiled $100M in upgrades at One Lincoln to lure tenants back, betting big on amenities in Boston’s recovering office market. 

• Capital gains: BXP is earning its highest development returns in D.C., where limited competition, strong preleasing by law firms, and high-end projects are driving 8%+ yields.

• Optimism wins: Despite declining RevPAR and weaker travel trends, Hilton posted higher profits and is bullish on future growth.

• Rustic roots: Outbound Hotels is partnering with CoralTree to grow its nature-focused resort brand, adding new locations in Yosemite and Sedona. 

• IPO drama: A judge has halted mass layoffs at the OYO Times Square hotel amid a fiery contract dispute with Highgate, just as OYO eyes an $8B IPO.

📈 CHART OF THE DAY