Daily Dose of Real Estate

Daily Dose of Real Estate for November 20

Day 9 without a tweet from Director Pulte — draw your own conclusions. In the meantime, rates inched up and mortgage applications felt the pain. Bill Ackman released his plan for GSE reform, but it’s unlikely to sway the hearts and minds of those actually in charge. Home values had to give sooner or later — and “later” has arrived, with Zillow estimating that more than 50% of homes have lost value since last year.

Make Mortgages Profitable Again (MMPA): mortgage bankers are back in the black as Q3 profits spike higher, helped by easing rates and rising applications against a flat labor base. The National Association of Home Builders reported that 41% of builders cut prices in November — the highest share since the pandemic and the first time exceeding 40% in the post-COVID period. The average price reduction for new homes held steady at 6%, while 65% of builders offered sales incentives.

The nearly $1T wall of CRE debt coming due in 2026 is already causing foreclosures to pile up. What happens when those terms worsen as owners refinance into substantially higher rates and face steep discounts to original values?

Let’s get you caught up and out the door in 3 minutes. Tim

Today’s newsletter was prepared by our AI platform ALFReD. Know Better.

Table of Contents

KEY TAKEAWAYS

Housing Market Stagnation Continues: The U.S. housing market remains stuck with sales and listings barely budging in October, as Americans grapple with high costs and economic uncertainty, though buyers are gaining negotiating power with homes selling for 1.5% below list price—the biggest October discount since 2019 1
Mortgage Rates Hit Four-Week High: The 30-year fixed mortgage rate climbed to 6.37%, pushing total mortgage applications down 5.2% as both purchase and refinance demand retreated, with potential homebuyers moving to the sidelines again 2
Mortgage Bankers Report Stronger Q3 Profits: Independent mortgage banks posted a pre-tax net production profit of $1,201 per loan in Q3 2025, up from $950 per loan in Q2, with 85% of mortgage companies posting overall profits as production revenue increases outpaced expense growth 3
Federal Reserve Enhances Bank Supervision: The Fed released new supervisory operating principles designed to focus examiners on material financial risks threatening bank safety and soundness, with Vice Chair Bowman emphasizing this is about “sharpening” rather than narrowing their supervisory focus 4
GSE Exit Strategy Gains Momentum: Bill Ackman advocates for a market-based exit plan for Fannie Mae and Freddie Mac, proposing NYSE relisting to demonstrate mark-to-market value while preserving mortgage affordability, as both companies’ shares roughly doubled in 2025 following Trump administration statements 5
Home Values Declining Nationwide: New Zillow research reveals 53% of all U.S. homes have lost value since last year—the highest share since 2012—highlighting ongoing economic challenges in the housing market 6
Q3 CRE investment surged 25.1% YoY to $150.6B, with multifamily leading at 51.1% annual growth and office sales up 14.6% 1
Multifamily cap rates expected to decline in 2026 after holding steady at 5.7% for seven quarters, with a 60-basis-point gap between current rates and fundamentals 2
$930B in CRE debt matures in 2026, more than triple the $300B maturing in H2 2025, with foreclosures already climbing to highest midyear total since 2014 3
REITs maintained strong Q3 performance with funds from operations (FFO) up 17.3% YoY to $21.0B and 93% average occupancy across sectors 4
Google announces $40B Texas expansion for AI data centers through 2027, marking the company’s largest state-level investment 5
Class A office leasing surged 12.5% in 2025, strongest performance since 2019, with AI-driven marketing delivering $874 ROI for every $1 invested

RESIDENTIAL REAL ESTATE MARKETS

The U.S. housing market has entered an unprecedented period of stagnation, with October data showing minimal changes across all key metrics. This represents a dramatic shift from the volatile conditions of recent years, as housing activity has stabilized at below-normal levels amid high prices and economic uncertainty.

MARKET ACTIVITY PLATEAUS AMID ECONOMIC UNCERTAINTY

Sales Activity Remains Flat: Pending home sales, closed home sales, and new listings all remained essentially unchanged in October compared to both the previous month and year-earlier levels 1
Price Growth Slows Dramatically: The median home sale price rose just 1.4% year-over-year to $440,523, down from 4.1% increases seen at the start of 2025 1
Historic Low Volatility: Pending sales fluctuated between 477,141 in January and 502,003 last November—a gap of just 24,862 units, representing the smallest variation for any 12-month period since 2013 1
Buyer-Seller Imbalance: Redfin estimates approximately 500,000 more home sellers than buyers are actively participating in the market, creating downward pressure on prices 1
Existing Home Sales Stagnate: Sales came in at a seasonally adjusted annual rate of 4.24 million in October, little changed from both a month and year earlier, with Redfin economists expecting 2025 to end roughly flat with 2024—the worst year for sales since 1995 1

BUYERS GAIN UPPER HAND IN NEGOTIATIONS

Biggest October Discount Since 2019: The typical home sold for 1.5% less than its final list price, representing the largest October discount since 2019 1
Fewer Bidding Wars: Only 24.9% of homes sold above their final list price, the lowest October share since 2019, indicating reduced competition among buyers 1
Homes Taking Longer to Sell: The typical home spent 51 days on the market before going under contract, seven days longer than the previous year and the slowest October pace since 2016 1
Increased Inventory Provides Options: Active listings increased 6.8% year-over-year nationally, giving buyers more choices and negotiating leverage 1
Seller Motivation Drives Concessions: Redfin agents report that many current sellers are people who have to sell due to job changes, divorce, or other major life events, contributing to their willingness to negotiate 1

REGIONAL VARIATIONS PAINT COMPLEX PICTURE

Midwest Leads Price Growth: Cleveland posted an 11.6% year-over-year increase, followed by Newark, NJ (10.9%) and Detroit (10.4%) 1
Florida and Texas Show Declines: Jacksonville fell 4%, Dallas dropped 3.6%, and Atlanta declined 2.5% year-over-year 1
Bay Area Posts Declines: All three Bay Area metros—San Jose, San Francisco, and Oakland—posted price declines, with San Jose-Sunnyvale-Santa Clara at $1.9 million but up only 0.8% year-over-year 1
Florida Markets Show Mixed Results: West Palm Beach led pending sales growth at 21.6%, Tampa at 18.4%, though analysts note some increases may reflect recovery from hurricane-related disruptions in October 2024 1
San Francisco Demand Surges: San Francisco saw pending sales rise 12% and closed sales increase 16.1%, while active listings fell 12.7%, creating a unique market dynamic 1

MORTGAGE MARKETS

Mortgage markets experienced mixed signals in recent weeks, with rates climbing to four-week highs dampening application demand, while mortgage bankers reported their strongest quarterly profits since the market volatility began in 2021. The contrast highlights the industry’s adaptation to challenging market conditions.

RATES CLIMB TO FOUR-WEEK HIGH, DAMPENING DEMAND

30-Year Rate Inch Higher to 6.37%: The 30-year fixed mortgage rate climbed to 6.37% from 6.34% the previous week, marking the third consecutive week of increases 2
Total Applications Fall 5.2%: Mortgage application volume dropped 5.2% on a seasonally adjusted basis as potential homebuyers moved to the sidelines again 2
Loan Sizes Decline: The overall average loan size across both purchase and refinance applications fell to its lowest level since August 7
Rate Environment Remains Elevated: Current mortgage rates remain more than double the pandemic-era lows, with jumbo rates at 6.39% and FHA-backed loans at 6.14% 8

MORTGAGE BANKERS POST STRONGEST Q3 PROFITS SINCE 2021

Production Profits Jump 26%: Independent mortgage banks reported a pre-tax net production profit of $1,201 per loan in Q3 2025, up from $950 per loan in Q2 2025 3
85% of Companies Profitable: Roughly 85% of the more than 325 mortgage companies in MBA’s sample posted overall profits when combining both production and servicing operations, up from 80% in Q2 3
Production Revenue Drives Growth: Total production revenue increased to 359 basis points in Q3, up from 346 basis points in Q2, with per-loan production revenues rising to $12,310 from $11,914 3
Expenses Rise Modestly: Total loan production expenses increased to 326 basis points from 321 basis points, with per-loan costs rising to $11,109 from $10,965 3
September Lock Surge: A surge in loan applications that locked in September were recognized in Q3 earnings, with most of these locks expected to be reflected as closed loan volume in Q4 3

REFINANCE ACTIVITY RETREATS DESPITE YEAR-OVER-YEAR GAINS

Weekly Volume Falls 7%: Refinance applications declined 7% for the week but remained 125% higher than the same week one year ago when rates were approximately half a percentage point higher 2
Rate Sensitivity Persists: The refinance market continues to show extreme sensitivity to rate movements, with borrowers quickly retreating when rates tick higher 2
Capacity Planning Challenges: Volatile refinance volumes complicate lenders’ capacity planning and revenue forecasting as small rate changes produce disproportionate volume swings 2

PURCHASE APPLICATIONS SHOW RESILIENCE

Purchase Volume Down 2%: Purchase mortgage applications declined 2% for the week but remained 26% higher than the same period last year 2
Stability Despite Rate Moves: The purchase market has “hovered around the same level for several months, regardless of interest rate moves,” suggesting baseline demand has stabilized 2
FHA Applications Increase: FHA purchase applications showed a small increase during the week, indicating government-backed lending continues providing access for borrowers priced out of conventional markets 2
Purchase Share Dominates: The purchase share of first mortgage originations by dollar volume was 82% for mortgage bankers, compared to 67% for the mortgage industry as a whole 3

BUILDER SENTIMENT REFLECTS MARKET CHALLENGES

41% of Builders Cut Prices: The National Association of Home Builders reported 41% of builders cut prices in November, the highest share since the pandemic and first time exceeding 40% in the post-COVID period 9
Average Price Reduction 6%: The average price reduction remained at 6%, unchanged from the previous month, while 65% of builders offered sales incentives 9
Future Sales Expectations Drop: Sales expectations have declined as demand-side weakness from a softening labor market and stretched consumer finances contribute to difficult sales conditions 9

REGULATORY DEVELOPMENTS IN REAL ESTATE

Federal agencies have introduced significant supervisory and regulatory changes that could reshape housing finance oversight and GSE operations. These developments signal potential structural shifts in how banks are supervised and how government-sponsored enterprises may exit conservatorship.

FEDERAL RESERVE SHARPENS BANK SUPERVISION FOCUS

New Supervisory Operating Principles Released: The Fed released principles designed to focus examiners on material financial risks threatening bank safety and soundness, emphasizing “sharpening” rather than narrowing supervisory focus 4
Risk-Based Examination Alignment: The new principles align bank examination and ratings to material financial risks while reducing duplication between exams from different supervisors 4
Streamlined Remediation Process: The approach streamlines the remediation of issues cited by supervisors, with the Fed training examiners to ensure prompt implementation 4
Future Formalization Planned: Supervision leadership plans to continue refining these principles and formalizing them in public supervisory guidance or regulatory changes where appropriate 4

CFPB PROPOSES REGULATION B AMENDMENTS

Three Principal Areas Addressed: The CFPB’s Notice of Proposed Rulemaking amends Regulation B to clarify disparate-impact liability, define “discouragement” under lending practices, and establish new restrictions on special purpose credit programs 10
Disparate Impact Clarification: The proposed rule clarifies that ECOA does not authorize disparate-impact liability, representing a significant policy shift that could impact lenders’ compliance programs 10
Fair Lending Risk Management: The changes could have substantial implications for how lenders evaluate and adjust lending practices in their fair lending risk management strategies 10

GSE CONSERVATORSHIP EXIT STRATEGY GAINS ATTENTION

Ackman’s Three-Step Strategy: Bill Ackman advocates for repaying Treasury senior preferred stock, exercising Treasury warrants, and relisting shares on the NYSE to demonstrate mark-to-market value 5
Administration Commitment to Affordability: Treasury Secretary Scott Bessent emphasized “no change in the spread of mortgages over Treasuries” while believing “there are things that can be done to make mortgages cheaper for the American people” 5
Potential Timeline Acceleration: Commerce Secretary Howard Lutnick suggested the relisting could be “a this-year thing,” emphasizing the goal to “show a mark to market” while keeping mortgage costs low 5
Share Price Performance: Both companies’ shares roughly doubled in value during 2025 following administration statements, with strong investor interest across institutional and retail channels 5

MORTGAGE INDUSTRY COMPLIANCE CHALLENGES

Critical Defect Rate Rises: The overall critical defect rate in mortgage lending rose to 1.51% in Q2 2025, driven largely by sharp increases in appraisal and borrower eligibility defects 11
USMI Capital Ratio Request: USMI has requested Congress consider replacing the 2% Capital Ratio requirement with an updated stress-based, loan-level risk-weighted standard for FHA operations 11
Modernization of Housing Finance Regulations: The proposal reflects ongoing discussions about updating housing finance regulations to better reflect current market conditions and risk profiles 11

ECONOMIC NEWS

Economic data collection has been disrupted by the recent government shutdown, creating uncertainty for Federal Reserve policy decisions. Meanwhile, construction spending shows continued weakness, and housing affordability remains a critical challenge for consumers and the broader economy.

LABOR MARKET DATA DELAYED BY GOVERNMENT SHUTDOWN

FOMC Meeting Faces Data Gaps: The recent government shutdown has created significant data gaps complicating Federal Reserve policy decisions ahead of the December 9-10 FOMC meeting 12
Bond Markets Lack Direction: Matthew Graham of Mortgage News Daily noted that “bonds have been a rudderless ship during the government shutdown” as backlogged data returns slowly and uncertainly 12
Incomplete Statistics Expected: The delayed labor report may show more Americans found work after a sluggish summer, but data collection disruptions could result in incomplete statistics or delayed publication 12
Limited Market Inspiration: The surprise release of stale jobless claims data provided little market inspiration, while negative prints in weekly ADP numbers offered limited benefit to bond markets 12

CONSTRUCTION SPENDING REFLECTS ECONOMIC HEADWINDS

Nonresidential Construction Falls: Nonresidential construction spending fell for the third time in four months, highlighting ongoing weakness in manufacturing and commercial categories 13
Data Center Reliance Increases: The industry has become increasingly reliant on data center work to offset softness elsewhere, with this sector providing critical support for overall construction activity 13
Multiple Industry Challenges: The construction sector faces high borrowing costs, extraordinarily elevated uncertainty, and rising materials costs that are constraining activity 13
Public Sector Risk: With private nonresidential activity “buckling under the weight” of current pressures, a slowdown in public sector work could lead to particularly difficult quarters 13

CONSUMER SPENDING AND HOUSING AFFORDABILITY

Mortgage Rates Double Pandemic Lows: Current mortgage rates remain more than double the pandemic-era lows, creating significant barriers for potential homebuyers and stretching consumer finances 2
Demand-Side Weakness Evident: The combination of elevated rates and high home prices has contributed to demand-side weakness observed in housing markets nationwide 9
Builder Adaptation Strategies: Builder price reductions and increased use of sales incentives reflect economic pressure on both suppliers and consumers in the housing market 9

FEDERAL RESERVE POLICY IMPLICATIONS

December Meeting Uncertainty: The Federal Reserve’s December meeting faces uncertainty due to incomplete economic data resulting from the government shutdown 12
Private Data Provides Unclear Picture: Private data has painted an unclear picture of the labor market at the beginning of fall, while major company layoffs have been prominent in recent headlines 12
Interest Rate Policy Critical: Current rates significantly impact both purchase and refinance activity, with the Fed’s approach to future rate adjustments depending on labor market data and inflation trends 2

COMMERCIAL REAL ESTATE MARKETS (INCLUDING MULTIFAMILY)

The commercial real estate market posted its strongest quarterly performance since the Federal Reserve’s rate-hiking cycle began, with transaction activity surging across most major property types. Multifamily (apartment buildings) led the recovery with exceptional growth, while office properties showed surprising resilience after years of struggle.

Q3 RECOVERY ACCELERATES ACROSS MAJOR SECTORS

US commercial real estate investment hit $150.6B in Q3 2025, representing a robust 25.1% year-over-year increase with transaction activity rising 12.6% quarter-over-quarter 1
Over 45,000 properties changed hands nationwide during the quarter, marking the highest transaction count since early 2022 1
Multifamily (apartment buildings) dominated with $45B in sales volume, a staggering 51.1% year-over-year increase, representing 30% of all transaction activity 1
Median multifamily pricing climbed to $144 per square foot, up 17.3% year-over-year and 3.5% from Q2, continuing steady upward momentum 1

GEOGRAPHIC PERFORMANCE LEADERS

San Jose posted 9.3% annualized returns – the highest nationally, with West Coast tech hubs leading performance metrics 2
Orange County, San Diego, and San Francisco all posted 7%+ returns, driven by tight supply and sustained demand from tech sector growth 2
Houston stood out with 9% returns, second only to San Jose, while Miami followed closely at 8.4%, benefiting from migration and rent growth 2

OFFICE MARKET SHOWS SIGNS OF LIFE

Office sales volumes reached $19B, up 28.0% year-over-year, while transaction counts increased 14.6% as investors regain confidence in select markets 1
Median office deal size rose 23.8% with pricing hitting $135 per square foot, a 14.8% increase year-over-year, suggesting quality assets are finding buyers 1
Miami office prices surged 32.7%, leading all major markets as the city benefits from corporate relocations and hybrid work adaptations 1

INDUSTRIAL AND RETAIL MAINTAIN MOMENTUM

Industrial property volume rose to $29.6B (+26.5% year-over-year), driven by continued e-commerce growth and supply chain reshoring trends 1
Retail transactions totaled $23.1B (+10.9% year-over-year) as consumer spending patterns stabilize and experiential retail gains traction 1
Storage (+7.6%), automotive retail (+5.0%), and medical office (+4.6%) posted the largest quarter-over-quarter pricing gains 1
Hospitality properties continued struggling with transaction volume declining 11.9% year-over-year and total dollar volume dropping 18.5% 1

COMMERCIAL FINANCING MARKETS

Capital markets showed mixed signals with Real Estate Investment Trusts (REITs) performing strongly and capitalization rates (the return investors expect from properties) holding steady, but analysts expect significant changes ahead as market fundamentals suggest current pricing may be unsustainable. Commercial borrowing activity surged while lenders prepare for a challenging refinancing environment.

CAPITALIZATION RATES POISED FOR 2026 DECLINE

Multifamily cap rates (investor return expectations) held steady at 5.7% for seven quarters – the longest such streak in 25 years, but analysts expect this trend to end in 2026 2
First American’s model shows “true” cap rate at 5.1%, creating a 60-basis-point (0.6 percentage point) gap with observed rates, signaling current rates are higher than market fundamentals justify 2
Three key forces driving expected decline: distress resolution as commercial mortgage distress unwinds, easing credit conditions, and resilient renter demand 2
Household formation rose 2.7% year-over-year in Q2 2025, supporting underlying demand for multifamily properties despite economic uncertainty 2

REAL ESTATE INVESTMENT TRUST PERFORMANCE REMAINS ROBUST

US listed REITs (companies that own income-producing real estate) grew Funds From Operations to $21.0B in Q3, a 17.3% increase from the same period last year, with nearly two-thirds of REITs seeing funds from operations rise 4
Net Operating Income (property revenue minus operating expenses) reached $30.6B, up 5.2% year-over-year, while same-store net operating income climbed 2.8%, highlighting steady internal growth 4
REITs maintained 93.0% average occupancy across sectors, with retail leading at 96.9%, apartments at 95.7%, and industrial at 94.5% 4
Office properties trailed with 85.3% occupancy, but showed improvement from previous quarters as hybrid work models stabilize 4
81% of REIT debt is unsecured and nearly 89% at fixed interest rates, protecting against rate volatility and providing financial flexibility 4

COMMERCIAL BORROWING SURGES

Commercial and multifamily borrowing increased 36% in Q3, marking five straight quarters of growth on both quarterly and annual basis 7
Lending activity increased across most major property types and capital sources, led by particularly strong growth in office, retail, and hotel properties 7

COMMERCIAL SERVICING MARKETS

The servicing sector faces unprecedented challenges as a massive debt maturity wall approaches in 2026, with foreclosure activity already climbing to levels not seen since 2014. Rising interest rates are making refinancing significantly more difficult, while lenders grow less patient with restructuring requests.

2026 MATURITY WALL LOOMS LARGE

Over $930B in commercial real estate loans come due in 2026 according to MSCI – more than triple the $300B set to mature in the second half of 2025 3
Average rate on commercial real estate loans hit 6.24% this year, up from 4.76% on maturing debt, making refinancing significantly more expensive for borrowers 3
Lenders extended many loans during low-rate era, hoping to avoid losses, but these extensions created a much larger maturity wall for 2026 3
Lenders growing less patient with restructuring, especially for loans tied to struggling office buildings or highly leveraged apartment properties 3

FORECLOSURE ACTIVITY CLIMBING

Nearly 150 commercial real estate foreclosures recorded in first half of 2025 – the highest midyear total since 2014, signaling increasing distress across the sector 3
Two-thirds of apartment foreclosures involved loans from 2021 or 2022, when borrowing costs were still low but property values have since declined 3
60% of troubled apartment loans mature in second half of 2026, according to MSCI, suggesting even more distress ahead 3

PRIVATE CREDIT MARKET ROLE

Nonbank lenders raised more than $137B through 430+ closed-end debt funds since 2020, playing a key role in market stability 3
Borrowers relied on mezzanine (higher-risk, higher-return) and bridge debt to refinance and stay afloat as interest rates climbed, but this strategy is losing effectiveness 3

OFFICE LOAN DISTRESS MOUNTING

Commercial Mortgage-Backed Securities office delinquency rates hit 11.8% – almost six times higher than in 2019, with vacant buildings dragging down property values 8
Bank-held office loans show distress in only 5%-7% of cases, suggesting deeper losses may be delayed as banks work with borrowers 8
Washington DC commercial valuations down nearly $8B for the 2026 tax year as vacant office buildings impact municipal revenue 8

INDUSTRY NEWS

The real estate and mortgage industries continue to evolve with executive leadership changes, technology innovations, and shifting market dynamics. Companies are adapting their strategies to navigate current challenges while positioning for future opportunities. Major technology investments and strategic corporate moves dominated industry headlines, with Google’s massive Texas expansion highlighting the growing importance of AI infrastructure.

EXECUTIVE LEADERSHIP CHANGES

Lennar Co-CEO Retirement: Jon Jaffe will retire as Co-CEO and President of Lennar Corporation effective December 31, 2025, following a 40-plus-year career with the homebuilder 14
Stuart Miller Consolidates Leadership: Stuart Miller will replace Jaffe while continuing to serve as executive chairman and CEO of Lennar, consolidating leadership as the company navigates current market challenges 14
NEXA Lending Names New CFO: Von Maharaj was named Chief Financial Officer at NEXA Lending, bringing nearly 20 years of experience to help lead the company’s expansion path 15

TECHNOLOGY AND PRODUCT INNOVATIONS

Freddie Mac Quality Control Enhancement: Freddie Mac announced its new Quality Control Advisor Plus platform designed to streamline the quality control review process while saving lenders time and reducing risk 16
Automated QC Process: The GSE’s technology advancement automates aspects of the single-family quality control process, enhancing loan quality and driving efficiency through improved technological capabilities 16
Rocket Pro DSCR Launch: Rocket Pro launched its DSCR (Debt Service Coverage Ratio) product as investor demand surges in the current market environment, reflecting growing interest in investment property financing 17
Multifamily Technology Integration: The multifamily sector continues embracing smart home technology and cohesive mobile access throughout communities, reflecting adaptation to changing resident expectations 18

MARKET STRUCTURE DEVELOPMENTS

Commercial Borrowing Surges 36%: Commercial and multifamily borrowing increased 36% in Q3 2025, with loans for depositories up 36%, CMBS loan originations rising 31%, and investor-driven lender loans increasing 14% 19
Life Insurance Company Lending Declines: The dollar volume of loans for life insurance companies decreased by 22%, indicating shifting capital allocation patterns in commercial real estate finance 19
Investor Demand Drives Product Development: Traditional homebuying activity constraints have led to increased focus on investment property financing products and services 17

RISK MANAGEMENT AND COMPLIANCE

Mortgage Fraud Risk Increases 8.2%: Fraud risk in the refinance market increased 8.2% year-over-year in Q3 2025, with an estimated one in 118 applications showing indications of fraud 11
Refinance Market Vulnerability: The refinance market has become particularly vulnerable, with fraud and forgery becoming more common and costly compared to purchase transactions 11
AI Adoption Challenges: Industry experts emphasize the challenges smaller businesses face in adopting AI technology for fraud prevention as criminal technology schemes become more sophisticated 11
Technology-Fraud Prevention Intersection: The intersection of technology advancement and fraud prevention has become a critical focus area for mortgage industry participants of all sizes 11

GOOGLE’S MASSIVE TEXAS AI EXPANSION

Google unveiled plans to invest $40B in Texas through 2027, marking the company’s biggest state-level commitment to date for AI data center development 5
Three new AI data center campuses planned: one in Armstrong County and two in Haskell County, plus expansions in Midlothian and Red Oak near Dallas 5
New campuses expected operational by end of 2027, with infrastructure initiatives including over 6,200 megawatts of new energy generation for Texas grid 5
$7M grant package will fund AI-driven initiatives across healthcare, energy, and education, plus workforce development supporting 1,700+ electrical apprentices by 2030 5

AI-DRIVEN MARKETING DELIVERS MASSIVE RETURN ON OFFICE ASSETS

Class A (highest quality) office leasing surged 12.5% in 2025 – the strongest performance since 2019, but only assets using modern digital strategies captured this growth 6
$874 returned for every $1 invested in AI-driven digital marketing, compared to traditional commercial real estate marketing reaching only 11% of brokers in any given market 6
Key performance metrics included $5.56B in deals found, $10.5B in deals advanced, and $1.49B in deals closed through AI-powered platforms 6
4.8x improvement in broker reach within first month of deployment, achieving 89% broker market coverage compared to 11% through traditional methods 6

MAJOR PORTFOLIO TRANSACTIONS

Newbrook acquired two-property portfolio for $58M in Norfolk Metropolitan Area, with portfolio standing at 98% occupancy at closing 9
Company plans value-add opportunity by renovating about 70% of unit interiors where original finishes remain in place 9

CORPORATE STRATEGIC MOVES

Seritage Growth Properties continues asset liquidation process, with remaining properties expected to hit the market in the coming year as the former Sears real estate empire completes its wind-down 10
Hudson Pacific Properties announced reverse stock split plan as part of broader stabilization efforts amid market challenges, working to determine if office leasing recovery can offset studio operation struggles 11