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Good morning. Economic headwinds aren’t slowing down apartment demand. Absorption is up, supply is down, and rents are finally rising again.

Today's issue is sponsored by CSSI—it’s not too late to reduce your tax burden.

🎙️ This week on No Cap. CNBC’s Senior Retail Reporter Courtney Reagan joins hosts Jack Stone and Alex Gornik to break down the latest trends in Retail—from Q4 earnings to tariff shocks and everything in between.

Market Snapshot

*Data as of 04/14/2024 market close.

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• Get a quote: A Class-A office in LA received a $22.4M C-PACE loan to refinance improvements completed during construction. The loan amortizes over 30 years, and proceeds were used to recapture part of the developer’s original investment. (sponsored) 

• REIT realignment: REITs are increasingly turning to joint ventures, often taking smaller equity stakes but retaining operational control, as a strategic workaround to raise capital and manage risk. 

• Distress shift: CRE CLO delinquency rates improved modestly in March 2025, but a maturity wall, rising rates, and limited refinancing options continue to strain borrower performance and challenge portfolio stability. 

• Mixed momentum: Manhattan’s Q1 investment sales hit $2.7B with mixed results across asset classes—retail led in both pricing and transaction growth, while multifamily and office sectors struggled to gain footing.

• Keeping it in the family: Nearly 1 in 3 Manhattan homes sold in 2024 were purchased through trusts, as wealthy parents increasingly gift luxury real estate to their children amid rising prices and looming tax changes.

• Risk management: Major US lenders are boosting reserves and signaling caution as economic uncertainty, tariff volatility, and inflation risks cast a shadow over loan demand and market stability.

• Growth watch: In a year of subdued national activity, Yardi Matrix identified 2025’s top 10 emerging multifamily markets where smaller metros are standing out with sharp investment gains, strong pipelines, and rising unit prices. 

• Texas on top: Texas led the nation in build-to-rent momentum in 2024, with DFW and Houston fueling record completions and positioning the state as a long-term hotspot for single-family rental development.

• Revenue squeeze:  NYU’s Furman Center warns that rent-stabilized buildings, especially older ones in the Bronx, are facing escalating financial shortfalls under 2019’s HSTPA, threatening their long-term viability.

• Mega project: Tishman Speyer secured $331M from a Canadian pension fund to finance a 924-unit luxury tower in Jersey City, part of a larger 2,000-unit waterfront development slated for completion by 2028. 

• Digital demand: Developers have proposed nearly 17 MSF of new data center campuses in Georgia, signaling a decade-long expansion that could reshape the state’s digital landscape and test its power grid.  

• Industrial reset: The industrial market is cooling off as vacancy rates hit 7% in Q125, signaling a return to pre-pandemic norms amid high inventory, slower leasing, and flattening rent growth.

• Desert deal: ViaWest Group has sold Tempe’s Sight Logistics Park—an office-to-industrial conversion totaling 357 KSF+ as investor appetite in Phoenix’s industrial sector continues to run hot.

• Market buffer: Despite looming tariff threats, retail is expected to stay resilient thanks to record-low availability rates, which offer a cushion as retailers navigate rising costs and supply chain pressures. 

• Expansion mode: Sam’s Club is ramping up growth with plans to open 15 stores annually and remodel all 600 locations, betting that value-focused retail will thrive in a tariff-heavy environment. 

• Tariff shield: Off-price retailers like TJ Maxx, Ross, and Burlington are largely insulated from US–China tariffs, thanks to their opportunistic sourcing models and lean inventories.

• Brooklyn debut: The Goddard School has signed a 20-year lease for over 10 KSF in Greenpoint’s Tower 77, marking its first Brooklyn location as it brings play-based early education to the borough’s growing family demographic.

• Funding fallout: NIH budget cuts could shrink demand for life sciences real estate, with New York alone projected to lose $880M in support, potentially stalling projects and squeezing smaller labs and startups.

• Social scaling: LinkedIn has purchased a 120 KSF R&D building next to its Sunnyvale HQ for $75M, reinforcing its Silicon Valley footprint amid a high-vacancy office market.

• Madison move: Apollo Global Management has locked in 100 KSF across four floors at 590 Madison Avenue, consolidating part of its NYC office presence in the STRS Ohio-owned Midtown tower.

• Suburban surge: DFW’s office market posted its strongest Q1 since 2019, driven by leasing momentum in suburban hubs like Plano and Las Colinas, even as vacancy rates remain elevated.

• Airport deal: An Alabama firm acquired the Hilton Atlanta Airport hotel in Hapeville for $111M, marking a significant deal near one of the nation’s busiest travel hubs. 

• Deadline approaching: Casino proposals from SL Green, Silverstein, and Soloviev risk disqualification as state delays in environmental reviews threaten their ability to meet key land-use deadlines.

📈 CHART OF THE DAY