Together with

Good morning. The Fed may be cutting rates, but cap rates aren’t blinking. In the net lease world, it’s all about risk, not rates, as the market settles into its new normal.

Today’s issue is sponsored by AirGarage—the platform turning outdated parking lots into higher-revenue assets.

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CRE Trivia 🧠

How much did the United States pay Russia for Alaska on a per-acre basis?

(Answer at the bottom of the newsletter)

Market Snapshot

*Data as of 1/6/2026 market close.

Risk Repricing

TOGETHER WITH AIRGARAGE

Going Gateless: How a Baltimore Owner Increased Parking Revenue by 28%

The Opportunity

In the heart of Baltimore, Washington Hill’s surface lot connects residents, local shops, and hospital visitors—making it one of the city’s most in-demand parking spots.

The Problem

Old gates. Broken hardware. Spotty enforcement. Drivers were fed up, and ownership was losing money every day.

The Solution

AirGarage stepped in with a gateless, LPR-powered system that brought order to the chaos—mobile payments, dynamic pricing, and instant visibility into performance.

No more jammed gates. No cash to collect. No downtime.

Since switching, Washington Hill has seen smoother operations, higher revenue, and happier parkers. Modernizing parking doesn’t just fix problems—it drives performance.

*This is a paid advertisement. Please see the full disclosure at the bottom of the newsletter.

• Underwrite deals in minutes: Eliminate hours of manual modeling — AI underwriting that helps you parse, analyze, and identify the most promising multifamily deals in record time. (sponsored)

• Muted impact: New research finds that recent U.S. tariffs reshaped trade flows more than prices, blunting inflation but complicating economic forecasts. 

• BREIT bonus: Blackstone’s BREIT is offering a 1% bonus share incentive through Q1 2026 to attract investor capital and accelerate growth in high-demand sectors like data centers and industrial. 

• Selective cycle: Principal’s 2026 real estate outlook highlights a shifting market where investor success hinges on strategic asset selection, income fundamentals, and navigating widening return dispersion. 

• Calendar crunch: From Fed decisions to global sporting events, 2026’s biggest CRE stress tests are already scheduled—turning uncertainty into a matter of timing, not surprise. 

• Ripple effect: A viral daycare fraud probe in Minnesota has triggered federal scrutiny and payment freezes, forcing CRE lenders and landlords to rapidly reprice risk across an entire metro. 

• Slow rebuild: A year after wildfires, Pacific Palisades sees slow progress as construction begins, but residents and retailers remain cautious to return.

• Stressed stability: Multifamily CMBS delinquencies are stabilizing near 6.6%, signaling pressure is easing, but refinancing risks still loom. 

• Conversion capital: Post Brothers secured $465M in C-PACE financing—setting a national record—to launch D.C.’s largest office-to-residential conversion. 

• Phoenix pop: Phoenix topped the nation in Q3 apartment demand, absorbing 6,000+ units, more than double its historical average. 

• Housing hope: San Francisco approved Crescent Heights’ 67-story, 1,000-unit tower at 10 S. Van Ness, potentially its largest housing project in years. 

• Bi-coastal buys: Waterton capped 2025 with major multifamily acquisitions in Florida and California, betting on a more balanced market by late 2026.

• Supply hangover: High vacancies and policy shifts defined a transitional year as industrial real estate worked through a lingering supply glut.

• EQT expansion: EQT Exeter acquired a 76K SF Torrance warehouse in a $51.5M sale-leaseback deal—likely with Frito-Lay—as it doubles down on industrial assets. 

• Digital footprint: Prologis is planning a 13-building, 600-acre data center campus near Indianapolis, expanding its growing push into digital infrastructure across the U.S. 

• Storage acquisition: Safeguard Self Storage acquired a 63.8K SF industrial building in Brooklyn’s Borough Park for $40.25M. 

• Boom lag: Savills finds America’s manufacturing revival lags the hype, with many projects delayed, downsized, or missing key details.

• Name nostalgia: Brookfield Properties is rebranding its retail division as GGP, reviving the legacy mall brand to reflect its independent identity and deep Chicago roots. 

• Deal dispute: A nearly $1B sale of 119 JCPenney stores has stalled, with buyer Onyx Partners suing to recover part of its deposit. 

• Benihana blitz: Benihana plans to open 10 new locations across the San Francisco Bay Area as it builds on record-setting performance in San Mateo. 

• Deal detour: MassDOT has extended leases at 14 highway service plazas through mid-2027 after Applegreen's $900M redevelopment bid unraveled.

• Dallas exodus: AT&T will relocate its global HQ from downtown Dallas to Plano by 2028, marking another major corporate exit from one of the nation’s hardest-hit urban cores. 

• Skyline bet: Related Cos. and Oxford Properties secured $2.45B for 70 Hudson Yards, the largest NYC office construction loan since 2020.

• Miami moves: Skyline Financial is opening its first Miami office with a 26K SF lease at 1501 Biscayne Blvd, joining a wave of new tenants flocking to the evolving Omni Center. 

• AI impact: A new Vanguard report finds that generative AI is boosting productivity rather than replacing jobs—suggesting office demand isn’t vanishing anytime soon. 

• Market correction: A Seaport office building that sold for nearly $119M in 2016 has traded for just $52M, highlighting steep valuation resets in Boston’s office market.

• Final sales: Moody National REIT II sold two Texas Homewood Suites properties as part of its ongoing liquidation, aiming to wind down assets and return proceeds to shareholders.

A MESSAGE FROM ARBOR REALTY TRUST

Arbor Realty Trust’s Affordable Housing Trends Report

As the cost of living in the U.S. climbs, the shortage of affordable housing is a persistent challenge for many communities. As calls for change grow louder, Arbor Realty Trust and Chandan Economics document federal and state initiatives aimed at alleviating housing pressure.

Explore our investor’s guide to find out how new affordable housing opportunities and lingering challenges are converging in a sector known for its strength, stability, and consistency.

*This is a paid advertisement. Please see the full disclosure at the bottom of the newsletter.

📈 CHART OF THE DAY

CRE Trivia (Answer)🧠

In 1867, the United States purchased Alaska from Russia for $7.2M, which works out to roughly 2 cents per acre. At the time, the deal was widely mocked as “Seward’s Folly,” but Alaska later proved rich in gold, oil, and timber, making it one of the biggest bargain deals in history.