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After nearly two years of falling valuations, U.S. apartment prices are back in positive territory (+1% YoY mid-2025). Federal rate cuts totaling 50 bps, restored 100% bonus depreciation, and expanded tax credits are reviving investment and deal flow across most metros.
📊 Quick Dive
Multifamily asset values had fallen ~19% since 2022 but are now rising again as 10-year Treasury yields stabilize near 4.1%.
Rent growth returned positive (+0.5–1% YoY) as completions fell to ~1.1 units per 1,000 people — half of last year’s pace.
Fannie/Freddie refinance volume is rising with rates near 5.5%, easing pressure on 2020–21 loan vintages.
Read the full Signal
Powered Land Rush: AI Spurs a New Industrial Frontier
Developers are racing to secure “powered land” — sites with pre-secured electricity capacity for AI data centers. Hines estimates 40,000 acres will be needed globally within 5 years — double today’s supply. Premiums of 35–50% are now common for land near substations, and major players like Digital Realty and Blackstone are effectively becoming energy developers.
High-capacity power, not location, is the new bottleneck: hyperscale facilities need 100 MW + each, with 3–5 year grid delays in key markets. The Midwest and Texas are emerging hubs thanks to surplus renewable energy. Read Full Signal →
BlackRock-Nvidia $40 B Data Center Bet Reframes Capital Markets
In a landmark move, BlackRock, Nvidia, and Microsoft are acquiring Aligned Data Centers for $40 B — triple the scale of prior sector M&A. The deal implies 30× EBITDA, reflecting conviction in long-term AI infrastructure demand. The consortium plans to double capital to $100 B, blending tech and institutional capital in a new model of “infra-tech” investing.
Public REITs rallied on the news as valuations across digital real estate reset higher. Expect further consolidation and record data-center construction through 2026–28. Read Full Signal →
Banks Stretch CRE Loans — Modifications Up 66% YoY
Banks modified $27.7 B in CRE loans by mid-2025, up from $16.7 B a year ago — the fastest rise since the pandemic. Offices drive the majority of workouts, followed by retail and hotels. Regulators are allowing “prudent extensions” to avoid forced sales, while private credit funds circle discounted debt.
Modified loans remain just ~1% of total CRE exposure, but the pace signals strain. If rates fall another 50–75 bps, many could refi out; otherwise, late 2026 may bring a second-wave of defaultsRead Full Signal →
Operators are shifting from defense to disciplined offense. The combination of easing rates, improved agency liquidity, and revived tax incentives gives well-capitalized buyers a 6- to 12-month window to capture value-add acquisitions before cap rates compress further.
Focus on balance-sheet efficiency: lock fixed-rate debt, add supplemental loans for capex, and revisit failed 2023 deals with 5–10% lower pricing. Use today’s stability to retrain leasing teams, sharpen underwriting discipline (DSCR > 1.25×, 0–2% rent growth in supply-heavy markets), and control expenses — especially insurance and taxes still rising 8–10% YoY in some Sunbelt metros.
Two More Fed Cuts Likely — 25 bps each by Q1 2026, compressing multifamily loan spreads another 50–75 bps.
Q4 Transaction Bump — Expect 15% QoQ increase in deal closings as sellers adjust to the new rate regime.
Capital Redeployment — Institutional equity expected to re-enter early 2026; watch joint-venture volume surge.
Refi Wave Ahead — 2019–20 loan maturities spark refinancing demand — early movers can lock sub-6% rates.
Sunbelt & Midwest Strength — Tightening supply and positive absorption point to steady rent recovery into 2026.
