HUD Weighs Two-Year Cap on Rental Aid

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Good morning. A proposed policy shift could shorten how long low-income families receive federal housing support—potentially impacting over a million households.

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🎙️This week on No Cap Podcast, Janet LePage joins Jack and Alex to unpack her wild rise in real estate, navigating rate hikes, distressed deals, and the secret power of washer-dryer installs.

Market Snapshot

Rental Assistance

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• Cap rate compression: Multifamily underwriting metrics improved modestly in Q2, with slight cap rate compression and stronger value-add buyer sentiment.

• Distress retreat: CRE CLO distress dropped 230 bps in June to 10.9%, signaling a temporary reprieve in a volatile market.

• Confidence creeps: Builder sentiment rose slightly in July, but high rates still weigh on housing.

• Capital crunch: CRE dealmaking is slowing as rising borrowing costs and cautious lending tighten access to capital.

• DST boom: DST offerings hit a 2025 high in June, raising $630M and pushing YTD equity up nearly 50% over last year.

• Tiny loans: A new bipartisan bill would let the federal government back second mortgages for ADU construction. 

• Construction dip: Single-family housing starts fell 10% YoY in June as rising inventory and sluggish buyer demand pressured builders to pull back.

• RIP: Donald Soffer, the visionary developer who transformed swampland into Aventura and helped shape South Florida’s skyline, has died at 92.

• Housing setback: NYC pulled the plug on the Haven Green project, halting affordable senior housing in favor of preserving a small park.  

• Miami makeover: Related Group will redevelop a Miami public housing site into 115 affordable units, part of a broader partnership with Miami-Dade. 

• New venture: Invesco and Bozzuto formed a $1B multifamily investment venture, kicking off with a 220-unit value-add acquisition in Orlando. 

• Regional momentum: Developers in North Carolina’s Triad region are planning thousands of new units, driven by job growth and relatively affordable housing.

• Factory pivot: California Forever, once pitched as a utopian city, now plans a 2,100-acre industrial park focused on defense manufacturing. 

• Tariff impact: Despite solid fundamentals and robust leasing, the Inland Empire’s industrial market faces falling rents and investor hesitation. 

• Investor settlement: Equinix will pay $41.5M to settle claims it inflated earnings by misclassifying expenses to boost executive bonuses. 

• Profit jump: Rexford Industrial posted $113M in Q2 net income, a 42% increase YoY.

• Brady brand: Tom Brady’s CardVault memorabilia chain is opening its first Midwest store near Wrigley Field. 

• Cargo crime: As organized retail crime shifts from stores to supply chains, Congress is weighing new legislation to tackle a surge in cargo theft.

• Debt discount: SL Green and Jeff Sutton bought the $219.5M mortgage on their struggling Times Square retail property for just $63M, less than 30% of its balance.

• Deal dropped: Canadian retailer Couche-Tard has officially abandoned its $47B bid to acquire 7-Eleven parent Seven & i Holdings.

• Adaptive reuse: More than 3% of Houston’s total office inventory is set to be converted, as the city becomes a national leader in repurposing outdated buildings.

• Capital confidence: SL Green has topped $1B in fundraising for its NYC-focused debt fund, boosted by distressed asset plays and strong leasing momentum.

• Resilient sector: Despite over $1T in federal healthcare cuts, the medical office market remains steady.

• Regional hub: Rivian is opening a new East Coast headquarters in Atlanta ahead of its long-awaited Georgia EV factory build. 

• Google exit: Google plans to give up a Sunnyvale office it’s failed to sublease, adding to its broader pullback from Silicon Valley.

• Hotel dispute: Crescent Heights is suing CitizenM, alleging the hotelier failed to transfer commercial units tied to a Miami Beach project. 

• Historic hoops: A 132-year-old basketball court discovered in St. Stephen, New Brunswick, the oldest known to survive, is being transformed into an interactive museum to drive tourism.

📈 CHART OF THE DAY