📢Good morning,
The national multifamily construction pipeline fell to just ~543,000 units in Q2 2025, a decade low and down nearly 60% from its 2023 peak. Developers have slammed the brakes amid high costs, financing hurdles, and oversupply pressures. While deliveries remain heavy through 2025, new supply will plunge in 2026–27, setting up a rental market reset.
📊 Quick Dive
Pipeline: ~543k units under construction, lowest since 2015 (RealPage).
Drop: –37% YoY, with Sunbelt metros down 50%+ (Austin, Phoenix, Dallas).
Outlook: Only ~354k units slated to deliver next year, then a sharp fall-off.
CRE Prices Stabilize as All-Property Index Posts First Back-to-Back Annual Gains Since 2022
The RCA CPPI rose +0.9% YoY in July, marking the first two-month streak of annual gains in three years. Industrial (+3.4% YoY) and retail (+4.2% YoY) led the recovery, while multifamily and office values flattened. Secondary markets are driving the rebound with +2.6% YoY gains, while major metros remain negative at –3.8%. Capital markets are interpreting this as a tentative market floor. (MSCI), [Read Full Signal →]
Lifestyle Mixed-Use Office Districts Outperform – 32% Rent Premiums and Faster Lease-Ups
JLL reports that office space in mixed-use “lifestyle” hubs leases up twice as fast and commands rents 32% higher than traditional offices. Vacancy in these nodes is 12.5% versus the 22.5% U.S. office average. Institutional investment in lifestyle districts has grown from near zero pre-2015 to 8% of acquisitions, signaling a structural shift toward live-work-play markets. (JLL), [Read Full Signal →]
This week’s signals highlight a pivot point. Multifamily is entering a classic cycle shift: today’s oversupply pain will be followed by undersupply as construction collapses. Investors should position now for 2026–27 tightening.
Meanwhile, pricing stabilization across sectors confirms capital is reengaging—albeit selectively. Operators in secondary markets and lifestyle office nodes can expect more liquidity and firmer values. For developers, the lesson is timing: the window to break ground for delivery into the 2027 shortage is opening, but only well-capitalized players can seize it
Multifamily supply surge peaks in 2025, then drops sharply by 2026.
CRE pricing recovery will be uneven—industrial and retail first, multifamily next, office only in mixed-use nodes.
Institutional capital is tilting toward “future-proof” offices and supply-constrained housing markets.
Expect Q4 2025 deal volume to improve as bid-ask spreads narrow and buyers test the floor.
Chart of the Day: Industrial Pipeline Peaks, Vacancy Follows. U.S. industrial completions hit a record ~380M SF in 2023, more than double the 2018 level. The surge pushed vacancy to nearly 6% by 2024. With new starts now collapsing, completions will decline sharply through 2026, setting up for tighter availability and renewed rent pressure. Image: U.S. Industrial Supply & Vacancy Trends (2018–2026, CRE360)
