D.C. Council Passes Controversial Rental Act Aimed at Overhauling Housing Market

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Good morning. The D.C. Council has passed the Rental Act, a sweeping housing reform that reshapes eviction timelines and tenant purchase rights as the city faces mounting unpaid rent and stalled development.

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Market Snapshot

Rental Reform

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• Renovation ROI: By leveraging cost segregation for your commercial buildouts, you will be able to accelerate deprecation and unlock significant tax savings for your property. (sponsored)

• Housing handoff: Kennedy Wilson is acquiring Toll Brothers’ Apartment Living platform for $347M, gaining 18 properties, a $3.6B development pipeline, and management of $3B in assets. 

• Ownership imbalance: Institutional investors have slowed buying single-family rentals, but still keep prices elevated and out of reach for many buyers. 

• Generational shift: Homebuilders are rethinking designs as aging Boomers, budget-conscious Gen Z, and child-light Millennials reshape demand for smaller, more flexible, and affordable housing. 

• Conflict cashout: Steve Witkoff sold a $120M stake in his real estate firm to reduce potential conflicts of interest tied to his new role as Trump’s special envoy. 

• Lease logic: Net lease REITs are holding steady in a volatile market, backed by strong tenant demand, solid access to capital, and resilient operating models.

• Tax backfire: A new study finds real estate transfer taxes often miss revenue targets and instead stall development, reduce home sales, and deepen housing shortages in major U.S. cities.

• Strong demand: Preleasing at top universities hit 93.7% in August, outpacing last year, though student housing rent growth slowed to 1.1% YoY. 

• DFW momentum: Dallas multifamily demand is outpacing cooling supply, driving higher absorption, stronger occupancy, modest rent growth, and over $3B in sales activity. 

• Project delayed: Investors are suing OKO Group for fraud over its stalled $100M-financed Fort Lauderdale apartment project, which has yet to secure a contractor three years after its promised start. 

• Brooklyn battle: Ian Bruce Eichner sold his long-contested Crown Heights site at 970 Franklin Ave. for $54M after years of failed rezoning fights over shadows on the Brooklyn Botanic Garden.

• Parcel pivot: UPS has sold four industrial and office properties to Fortress Investment Group for $368M in a major sale-leaseback move aimed at trimming $3.5B in costs amid falling shipping volumes. 

• Visa crackdown: A massive ICE raid at Hyundai’s $7.6B Georgia battery plant has sparked global backlash, stalling construction and casting doubt on future foreign investment in U.S. manufacturing. 

• Drug development: GSK will invest $1.2B in a new R&D and manufacturing hub in Pennsylvania, part of a broader $30B U.S. expansion amid industry-wide onshoring and regulatory tailwinds. 

• Strategic exit: Mapletree sold a six-building industrial portfolio near D.C. to Equus for $103M, netting a 60% gain over its 2018 purchase price.

• Retail reality: Retail sales rose 3.5% in August 2025, but inflation masked weak volume gains, with online shopping and apparel driving growth while foot traffic lagged.

• Brand revival: Brand House will convert up to 275 Kirkland’s Home stores into Bed Bath & Beyond Home locations over the next two years. 

• Tail end: Petco plans to close 25 stores in 2025 amid falling sales and growing competition, continuing its strategy to cut underperforming locations and boost profitability. 

• Local legacy: Regency Centers’ Westbard Square redevelopment in Bethesda prioritizes local input, blending retail, housing, and green space into a neighborhood-focused, mixed-use hub.

• RTO push: One year after Amazon's five-day office mandate, a wave of major employers is tightening return-to-office policies, giving office leasing a modest but growing lift. 

• Twice the price: Tishman Speyer sold Beverly Hills’ Maple Plaza to Kilroy Realty for $205M, more than double its 2005 purchase price and far above other LA office sales. 

• NY leaders: Despite high vacancies, L.A.’s biggest office owners are holding firm, with major portfolios still shaping the city's post-pandemic office landscape. 

• Tower trouble: Shorenstein’s 1818 Market Street office tower in Philly has entered receivership after a 36% valuation drop and an unresolved $222.9M loan default. 

• Legal standoff: Blackstone is fighting a $184M office-to-resi conversion in Chicago, citing easement issues and legal disputes over project ownership. 

• Branded switch: The former Virgin Hotel in downtown Chicago is being transformed into a 250-room Sports Illustrated Resort, blending sports culture with flexible ownership models.

📈 CHART OF THE DAY