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Good morning. In a surprising twist, affordable housing has become the hottest ticket in Los Angeles real estate. A city policy slashing approval times is drawing in developers who typically stick to market-rate projects.

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Market Snapshot

*Data as of 11/17/2025 market close.

Policy Pivot

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• Operational strength: REITs delivered strong Q3 2025 performance, with solid FFO growth, stable occupancy, and low-leverage balance sheets positioning the sector for opportunity in 2026. 

• Capital stress: A $930B wave of maturing CRE debt in 2026 is set to trigger more foreclosures and distress, as rising rates and mezzanine exposure strain capital stacks.

• Shutdown hangover: The 43-day government shutdown created major delays in affordable housing deals and battered the hotel sector, with fears of another disruption in early 2026. 

• Post-election pop: Despite political jitters over Mamdani, major real estate CEOs report record office leasing and long-term corporate commitments showing no signs of an exodus. 

• Grim graduations: The Class of 2026 faces the toughest job market in five years, as hiring freezes, layoffs, and AI disruptions squeeze entry-level opportunities across major industries. 

• Under pressure: About 1 in 4 U.S. households still live paycheck to paycheck, as inflation continues to outpace wage growth for lower- and middle-income Americans.

• Income focus: With national rent growth in the red, multifamily investors are rethinking underwriting strategies, focusing less on upside and more on risk, resilience, and realistic returns. 

• Supply slowdown: Austin apartment completions are set to fall by over 50% in 2026 after record growth, easing pressure on occupancy and rent declines. 

• Dumbo deal: A Carlyle Group affiliate sold a luxury rental at 181 Front Street in Brooklyn’s Dumbo to Hubb NYC for $85M. 

• Tax rush: Brooklyn apartment deliveries doubled this quarter as developers rushed to complete luxury projects ahead of expiring tax incentives.

• New record: Blackstone set a record with a $3.46B data center refinancing as AI demand boosts valuations and lender confidence. 

• Data alliance: BlackRock’s infrastructure arm and Spain’s ACS formed a $27B joint venture to develop global data centers. 

• Bandwidth strain: As Big Tech races to expand AI capabilities, a national shortage of fiber infrastructure is emerging as a critical chokepoint. 

• Paper potential: A closed International Paper mill in Savannah may attract shipbuilders due to its rare deepwater access and rail infrastructure. 

• Cold capital: Cerberus and Provender Partners recapitalized 1.7M SF of cold storage facilities across major U.S. markets in deals with Artemis and Heitman.

• Holiday hesitation: Consumers across income brackets are pulling back as economic uncertainty, job market strain, and student loan repayments push even wealthier shoppers toward discounts. 

• Shapewear surge: Kim Kardashian’s Skims hit a $5B valuation after raising $225M to fuel global brick-and-mortar expansion.  

• Return to retail: Institutional investors are returning to retail real estate, drawn by limited new supply, rising returns, and strong fundamentals in fast-growing Sun Belt markets. 

• Campus commerce: Retailers are increasingly targeting college towns and Gen Z hotspots with campus-adjacent stores and influencer pop-ups to build early brand loyalty. 

• Popup trends: Marine Layer is leaning into experiential retail this holiday season with creative, hands-on customization pop-ups in San Francisco and New York. 

• Center comeback: Continental Realty Corp. has acquired the partially vacant Commons at Willowbrook in Houston, betting on suburban retail strength and continued migration-fueled demand.

• Debt spiral: Worldwide Plaza will be auctioned after defaulting on $1.2B in debt and losing 80% of its value.

• Spec bet: Menashe Properties doubled down on Chicago offices, betting on spec suites and rising market sentiment to drive faster lease-ups.

• Commercial dip: Chicago's Loop saw commercial property values drop 7.2% in 2024, shifting nearly $470M in tax burden onto homeowners. 

• Quality first: Zurich North America is relocating to Willis Tower, downsizing its Chicago footprint by 50%. 

• Recovery mode: After bankruptcy and restructuring, WeWork is expanding again, adding space in Toronto and reporting strong occupancy gains across Canada.

• Profit driver: While hotel room revenues remain sluggish in 2025, food and beverage operations are driving growth and profitability, especially at luxury and resort properties.

• Luxury loss: Anthony Scaramucci’s Virgin Hotel in New Orleans faces a fire sale after its value was slashed by over 50%, leaving investors in his Opportunity Zone fund staring down a total loss. 

• Succession plan: Virgin Hotels is replacing CEO James Bermingham after a growth-focused tenure that added four new properties to its global portfolio.

📈 CHART OF THE DAY