Morning,
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Washington is about to open the floodgates.
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New research from Alvarez & Marsal estimates that a planned rollback of post-2008 “Basel III endgame” capital rules by U.S. financial regulatory authorities, the framework that forced banks to hold more loss-absorbing equity, will unlock $2.6 trillion in new lending capacity and free nearly $140 billion in capital for Wall Street’s biggest lenders.
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The proposals would scale back requirements for banks to hold high-quality capital relative to total assets, ease the supplementary leverage ratio, and soften the stress-testing regime that governs how much capital the largest institutions must reserve against potential losses.
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The Fed is already signaling support. Michelle Bowman, now vice-chair of supervision, has long argued that stricter capital rules drove lending into private credit markets. The pendulum is swinging back.
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That means lower capital buffers, looser stress tests, and more room for banks to lend, buy back shares, and finance large-scale investments, especially in AI, data centers, and energy infrastructure.
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JPMorgan alone could see $39 billion in freed capital and a 31% jump in earnings per share.
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Now add the next inevitable ingredient: rate cuts. Whether before Powell’s term ends or immediately after, interest rates will fall.
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Together, deregulation and easier money set the stage for a powerful surge in credit, dealmaking, and asset prices - a period of exuberance that will feel like the start of a new golden age.
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But history says otherwise.
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Every major boom born of cheap capital and relaxed oversight ends the same way; in overleverage, overvaluation, and eventual correction.
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For sponsors, the smart play isn’t to fight the cycle, it’s to get ahead of it:
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-> Secure long-term financing.
-> Build liquidity and investor trust before the rush.
-> Underwrite as if the downturn has already begun.
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There’s a wave coming. The question isn’t whether it crests, only who’s still standing when it breaks.
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***
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I feel a real sense of urgency right now.
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This is the moment to get active, to invest decisively, to lean in while the market is still catching its breath. But make no mistake - the rush won’t last. Once the policy tailwind wears off, the hangover will come, just like every time before.
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If you agree and have come through the last cycle with a clean balance sheet, a solid pipeline, and an engaged investor base, this is the moment to scale.
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If you want best-in-class investor relations and a system built to raise capital faster and more efficiently than ever, reply to this email - I’ll show you how the top sponsors are doing it.
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Adam

This week's Podcast/YouTube show

Guest: David Lynn, CEO United Investment Management

Real Estate's Banquet of Consequences

Few investors understand defense in this market better than my guest today, David Lynn, PhD, Chief Executive Officer of Unity Investment Management, a private-equity real estate firm with nearly $1 billion AUM, owning and operating 74 medical outpatient buildings across 30 states.

A graduate of the London School of Economics (PhD) and MIT (MBA), David has authored five books on real estate investment and is one of the sector’s most articulate macro thinkers, blending academic rigor with hands-on investment discipline.
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A leading expert in medical outpatient buildings (MOBs), David focuses on one of the most durable, low-volatility sectors in real estate, assets underpinned not by speculation or liquidity cycles, but by the steady demographic tailwinds of an aging America and the unrelenting demand for healthcare.

Listen to or watch the full episode here >>​
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Here is a summary of my conversation with David.

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The Real Cycle Driver: Demographics, Not Speculation

David’s thesis is simple but profound: while most investors chase rate cycles and Fed pivots, the true driver of durable real estate demand is demographic inevitability - aging, longevity, and medical innovation. As America grows older and wealthier, healthcare demand compounds. Outpatient facilities - smaller, more efficient, and technology-enabled - are replacing traditional hospitals as the nation’s preferred point of care.

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Why It Matters: Low Beta Meets Long Runway

Medical real estate has quietly become a steady performer with the lowest default rates across property types, even through the Global Financial Crisis. Tenants are mission-critical, non-discretionary, and often doctor-owned. Unity’s strategy leans into this resilience with a value-add model, shorter leases for inflation capture, and operational upgrades that compound returns without speculative risk. In an era where many multifamily sponsors face negative leverage, Lynn’s approach represents the opposite end of the spectrum: stable income, rising rents, and predictable renewals.

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Key Takeaways from David Lynn:

1. Telehealth ≠ Threat – Virtual visits drive more in-person care, not less.
2. Low Volatility Advantage – Medical tenants pay, stay, and rarely default.
3. Value-Add with Discipline – Shorter leases allow rent resets and higher escalations.
4. Demographics Rule – Personalized medicine and AI diagnostics create new space needs.
5. No Distress, No Drama – MOBs avoided the overleverage that hit multifamily and office.
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The Macro Lens: From Banquet to Reality

Lynn calls the past 15 years of ultra-low interest rates a “banquet of consequences.” Cheap debt fueled asset-price inflation, pushing investors into crowded trades like multifamily and industrial. When rates normalized, the hangover hit hardest where spreads went negative. In contrast, medical office held its ground - protected by rational underwriting, slower supply growth, and functional necessity.

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Cap Rates, Fed Policy, and Timing the Bottom

With inflation easing and the Fed’s first rate cut in motion, Lynn sees signs of an inflection point. Transaction volume is rising, spreads are tightening, and capital is re-entering selectively. His view: lenders will “blend and extend” rather than force distress, allowing values to recover alongside easing debt costs. For long-term sponsors, that means the window for accretive buying is opening now - before confidence fully returns.

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Tariffs, Trade, and Tech Efficiency

Unlike most macro pessimists, Lynn views tariffs and policy volatility as noise, not structural threats. Imports are just 11% of U.S. GDP, and AI-driven efficiency is counteracting cost pressures across logistics, energy, and manufacturing. The real deflationary force, he argues, is productivity - automation, supply-chain optimization, and domestic reshoring - not the Fed.

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Outlook: A “Bottoming” Cycle for Patient Capital

Lynn believes we’re near the trough of this correction. With the Fed cutting, cap rates compressing, and investor sentiment thawing, real estate fundamentals can catch up to capital markets. The winners will be those who stayed disciplined, preserved liquidity, and focused on real demand sectors like medical, housing, and logistics - not those chasing yesterday’s returns.

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Bottom Line for Sponsors & LPs:​
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• Medical outpatient buildings = cash-flow core with upside.
• Inflation is temporary; demographics are destiny.
• Focus on tenant quality, not just lease term.
• Blend patience with opportunism - this may be the cycle’s bottom.
• Remember: real estate’s true hedge isn’t timing - it’s durability.

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If you’re seeking clarity amid macro noise, this episode is your map through the next cycle - a data-driven case for patient capital in essential, demographic-backed assets.

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​Watch/listen to full episode here.

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Or feel free to reply to this email with any thoughts or comments.

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