MSCI: Multifamily Faces Steepest Price Drop Since 2008

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Good morning. Fresh data from MSCI shows that multifamily—long a commercial real estate frontrunner—is feeling the squeeze, with prices falling faster and rent growth stalling despite what should be its busiest season.

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🎙️ This week on No Cap podcast, Andover Properties CEO Brian Cohen shares how he scaled a self-storage empire, why today’s best deals are in once-overlooked assets, and how AI and data are driving their competitive edge.

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• GOP win: In a narrow 218–214 vote, the House passed President Trump’s sweeping $1.2T tax-and-spending package.

• Jobs report: June saw 147K new jobs, but slowing private-sector growth and declining labor force participation point to a cooling job market.

• Market cooldown: Sun Belt homes are taking longer to sell as rising inventory, high mortgage rates, and investor sell-offs cool once-hot markets.

• Stalled market: CRE deal volume remains low despite stable liquidity and economy, as misaligned price expectations, risk repricing, and widespread loan extensions stall transactions.

• Cash surge: Manhattan home sales jumped 17% in Q225, fueled by record-high cash purchases that made up 69% of transactions.

• Regulatory gaps: The US Appraisal Subcommittee, critical to maintaining trust in real estate valuations, has operated quietly for seven months with 30% fewer staff.

• REIT recovery: While REITs typically dip during recessions, they’ve historically outperformed stocks in downturns and rebounded faster.

• Temporary lifeline: A federal judge approved emergency funding to keep Joel Wiener’s bankrupt NYC apartment buildings running through July 11.

• Mall makeover: Crow Holdings is proposing 495 apartments at Atlanta's aging Northlake Mall, betting on multifamily as a catalyst for revitalization.

• Modular mission: Cook County has launched a $12M modular housing initiative in Humboldt Park, aiming to deliver 120 affordable homes and tackle Chicago’s deepening housing shortage.

• Blackstone bet: Blackstone acquired a $718M industrial portfolio from Crow Holdings, betting on long-term value as tariffs slow new supply and boost demand for logistics space

• Structural strength: Prologis sees short-term leasing uncertainty amid trade and supply chain volatility, but long-term demand remains strong due to e-commerce and structural growth trends.

• Florida footprint: Toronto-based Granite REIT has acquired the Coral Springs Logistics Center in South Florida for $36.4M.

• Houston milestone: An unnamed global electronics firm has acquired Fairbanks Logistics Park, Houston’s largest industrial deal of 2025.

• Spooky surcharges: Halloween retailers face supply chain uncertainty and rising costs as tariffs on Chinese goods threaten inventory levels, pricing, and retail tenant stability.

• Chapter 11: Del Monte Foods has filed for bankruptcy and is pursuing a sale of assets, including its headquarters and production facilities.

• Driving foot traffic: Shopping centers are turning underused areas into vibrant, guest-friendly pop-ups to drive traffic, boost sales, and test future tenants.

• Record vacancy: US office vacancies hit a new high at 20.6% in Q2, with weak demand, remote work, and looming federal lease cuts continuing to weigh heavily on the sector.

• Uber expands: Uber is doubling its Miami office footprint with a new 13K SF lease at Blackstone’s 3 MiamiCentral.

• Federal retreat: California leads GSA lease cancellations in 2025, opening up aging office space for possible conversion or discounted re-leasing.

• Downtown demand: LA office leasing hit 3.7M SF in Q2, its fourth straight quarter above the five-year average.

• Weekend warriors: US hotel performance ended June flat as strong weekend travel offset weak weekday demand, with rural and secondary markets outperforming major metros like New York and LA.

📈 CHART OF THE DAY