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Good morning. The BTR market just hit a new milestone with 39,000 SFRs completed in 2024. As demand for spacious, flexible living grows, southern metros are leading the charge—and even more growth is on the way.

Today's issue is sponsored by Ownwell—helping owners lower property taxes and increase NOI.

🎙️ In this week’s episode of No Cap Podcast, Jack Stone and Alex Gornik sit down with Spencer Burton, co-founder of Adventures in CRE and CRE Agents, who transformed the real estate industry by creating essential financial modeling tools used by thousands and pioneering AI-powered digital coworkers.

Market Snapshot

*Data as of 04/07/2024 market close.

BREAKING RECORDS

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• Efficiency pays: Leveraging Section 179D, allows commercial property owners and developers to access up to $5.81 per square foot in savings through energy efficient upgrades. (sponsored)

• Sales spike: CRE sales surged 30% YoY in February to $24.4B, led by major retail and office deals, though only retail and industrial posted price gains.

• Tariff tensions: The Bank of Canada warns that widespread tariffs are pushing up business costs and inflation expectations, prompting firms to delay investment and hiring. 

• Deal momentum: CRE M&A activity is showing signs of a rebound in 2025, driven by stabilizing interest rates and fresh capital, but deal volume remains cautious as investors weigh economic uncertainty. 

• Jobs jump: The US added 228K jobs in March—well above expectations—even as unemployment rose to 4.2%, complicating the Fed’s path forward amid sticky inflation.

• Leasing surge: US multifamily demand soared in Q125 with a record 138K units absorbed, outpacing supply and signaling renewed strength in the rental market. 

• Affordable expansion: Newport Beach is considering a plan to redevelop a commercial site near Fashion Island into a 120-unit apartment complex with affordable housing as part of its state-mandated goal to add nearly 2,400 low-income units by 2029. 

• Senior sale: Welltower acquired the 220-bed Oakmonte Village assisted living facility in Davie for $34.3 million, continuing its expansion in South Florida’s active senior housing market.

• Boston buy: Rockpoint acquired the 919-unit Altitude Apartments in Malden, MA, for $268M, with seller Metropolitan Properties retaining a stake. 

• Urban aid: NYC unveiled a new 64-unit affordable housing site in the Bronx as part of a growing initiative to move long-term shelter residents into stable homes using rental vouchers and city-backed support.

• Investor influx: Self-storage investments soared to $3B in 2024 as investors chased reliable returns in dense cities and growing suburbs.

• Flex appeal: Small-bay industrial properties are drawing investor interest with their adaptability, proximity to urban centers, and strong rent growth potential fueled by e-commerce, reshoring, and limited new supply. 

• Dallas debut: Rockefeller Group is planning a $52M industrial project in Irving, marking its first DFW development as it grows its footprint across Texas logistics hot spots.

• Beachfront buy: Israeli investor Gazit Horizons acquired the 96% leased, grocery-anchored Galt Ocean Marketplace in Fort Lauderdale for $34.4M, highlighting continued retail demand in affluent coastal neighborhoods.

• South Florida flip: Developer Jon Samuel sold the fully leased Sawgrass Landing retail plaza in Sunrise for $30M to NY’s SK Realty Management.

• St. Louis sale: Cave Springs Shopping Center in St. Peters, MO, sold for $22.1M in a 1031 exchange, highlighting investor appetite for fully leased power centers in tight retail markets.

• Life science bet: BioMed Realty acquired Pfizer’s 631 KSF Torrey Pines campus in San Diego for $255M, doubling down on long-term demand in the region’s top life science submarket.

• Midtown recap: Himmel + Meringoff completed a $93M recap of its Midtown West office building at 525 West 57th Street, reinforcing growing investor interest in life science and medical space.

• Mag Mile takeover: Blackstone Mortgage Trust has taken control of 444 N. Michigan Avenue via deed-in-lieu after Golub and CIM Group defaulted on a $95M loan, marking another high-profile distress play in Chicago’s struggling office market.

• Rent rebound: Orlando office rents are expected to rise to $23.85/SF in 2025 amid ongoing absorption and investor interest, though rising supply could push vacancy rates up to 13.6% by year-end.

• Nashville rising: Ridgeline and Deep Cove are breaking ground on The Bend, a mixed-use development in downtown Nashville featuring a Moxy hotel, 261 apartments, and 17 KSF of retail.

• Hotel outlook: US hotel RevPAR is projected to grow 2% in 2025, led by room rate increases and urban market strength, despite soft demand drivers and growing competition.

A MESSAGE FROM NEUTRAL

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📈 CHART OF THE DAY