02/18/2025
NMHC Recap
1.) U.S. Treasury has moved counter to overnight lending rate due to continued concern over inflation, slowing sales activity
2.) Continued growth of U.S. equity markets has overweighted institutional investors’ portfolios lending and investing, putting pressure on getting money into those investments.
3.) Downward trend for development starts will continue to push rents
4.) Current debt pricing and volatility of treasury combined with uncertainty with impact of Trump administration has made being aggressive on prices difficult.
5.) JV Equity in development deals are pushing sales because upside potential of waiting to sell is being diluted by time.
6.) Banks are increasing lending due to lower overnight rates, improving the deposit-loan spread and reducing reserves for losses. This boosts liquidity and encourages developers to sell. Higher lending rates continue to widen the gap, supporting further lending.
7.) Until lending markets stabilize and cap rates become predictable, short-term institutional equity will focus on distressed acquisitions. In 2025, most acquisitions will likely come from long-term investors as HNW individuals and total return buyers.
