Morning,

Over the next few weeks in this newsletter, I’ll be making the case for why right now may be the best time since the post-GFC era to get back into real estate deal flow.

Each edition will cover a different angle so you can decide not just whether to re-enter the market but how and at what scale.

What sparked this series is what I’ve been hearing lately: solid deals are finally emerging as the bid-ask gap narrows, yet many sponsors can’t raise the equity they need.

Institutional capital is pulling back as it often does during downturns, rebalancing portfolios or avoiding realized losses (especially in office). Liquidity evaporates, deal volume dries up, prices fall further until, eventually, transacting resumes and the market finds its bottom.

That’s why sponsors need multiple capital formation channels, especially the retail channel that institutions themselves are now pursuing.

But even the retail channel is challenging today, with investors, having been made promises of 'passive income, wealth building, and financial freedom' laid bare by stopped distributions, capital calls, and lost money.
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The retail channel is open, however, with the right track record and positioning but, if you’re scrambling to raise equity once a deal is already in play, you’re too late. It takes time to attract, nurture, and convert investors. The time to start building those relationships is now, heading into 2026, so you’re ready when opportunity strikes.

That’s exactly what I do: advise sponsors on capital formation from retail, family offices, and high-net-worth investors, and my team builds the systems that make the process work at scale.

Are you a sponsor who’s been through a few cycles, raised more capital than you need, built a reputation on discipline, and refuse to compromise just to stay active?

Maybe you’ve got the capital but not enough deals that meet your standards, or the deals but not the equity to move on them. Either way, now’s the moment to build something lasting, investor-first, controlled, and scalable on your terms.

If that’s where you are, let’s talk. I can help you structure, systemize, and scale it, without you ever giving up control or compromising the standards that make your platform exceptional.

In the meantime, here’s why this is the perfect moment to get aggressive in acquisitions, strengthen your capital systems, and position for the next wave of valuation growth while preparing to withstand the inevitable future downturn.
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Where We Are in the Cycle

Downturns hit fast; recoveries take longer. Using data from the Federal Reserve Bank of St. Louis Commercial Real Estate Price Index, I looked at the two major cycles I’ve been through:

1989–1997 - S&L

1. Peak: October 1989 → Trough: October 1993 → Recovery: October 1997
2. Downturn: Four years | Recovery: four years
   ​Savings and Loan crisis and slow 1990s rebound.

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2007–2016 - GFC

1. Peak: July 2007 → Trough: January 2008 → Recovery: July 2016
2. Downturn: Two years, three months | Recovery: six years, three months
   ​Global Financial Crisis; longest recovery on record.

Looking at these two most recent major downturns, the pattern is clear. During the Savings and Loan crisis, prices declined over four years and required another four to recover – an extended, symmetrical cycle of contraction and rebound.

By contrast, the Global Financial Crisis brought a two year, three month collapse followed by the longest recovery to prior peak pricing on record, lasting more than six years.

In both cases, however, the full recoveries lasted some 14 years in total before another major downturn suggesting that while downturns can vary in speed and depth, recoveries in commercial real estate tend to be prolonged once the market finds its footing.

We’re seeing the early signs of recovery from the latest downturn, already two years in the making, now:

• ​Deloitte, 2026 CRE Outlook: “Markets have seemingly turned a corner on recent performance downturns.”
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• ​CBRE, 2025 Midyear Review: “Rent growth appeared to bottom out at the end of last year; H1 2025 saw the first appreciable increase in over a year.”
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• ​PwC & ULI, Emerging Trends 2026: “Real estate emerged from its interest-rate-driven repricing cycle in 2025.”

Every credible source, and likely your own experience, suggests we’ve either hit bottom or are bouncing along it.

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Five Reasons CRE Is Poised for a Renaissance

1. Interest rates are coming down.

Once Powell terms out in May (if not before), the Fed will move toward easing. Historically, the Fed Funds Rate and the 10-year Treasury have a 0.75 correlation, with the 10-year following at smaller magnitude and with a lag. As long as rate cuts are viewed as economically justified (not political), long-term yields will follow, lowering borrowing costs and improving valuations. [The 10-year is already falling in response to recent FFR rate cuts - but see note below for proviso on the relationship between the two.]

2. Liquidity is expanding.

According to Alvarez & Marsal’s Bank Deregulation Primer 2025, the rollback of Basel III capital and liquidity buffers (de-regulation to pre-2008 levels) will unlock roughly $2.6 trillion in bank balance-sheet capacity. That’s a massive liquidity release. Banks will have room to lend, refinance, and reduce spreads, reviving transaction volume as debt markets thaw. (This trend is already beginning).

3. Tax incentives are back.

The new tax bill extends and makes permanent the Opportunity Zone program (effective 2027) and renews 100% accelerated depreciation for new investments. These measures, plus the standard depreciation, cost segregation, and deferral tools, make real estate as tax-efficient as it’s ever been.

4. Buy low, sell high.

A simple rule that’s hard to follow – except right now. CRE pricing is at cyclical lows, while stocks sit near all-time highs. For investors, the signal couldn’t be clearer: sell high (equities) and buy low (real estate). This is precisely the case for diversification you should be making to your investors right now.

5. A real estate President.

Without making a political statement, it’s just fact: we now have a President who’s spent his life in real estate. His instincts will favor lower interest rates, easier credit, and expanded access to private equity and private real estate through retirement plans.

-> Interest rates: Down.
-> Lending regulations: Relaxed.
-> Capital access: Broadened.
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Few scenarios could be more favorable for the industry.

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The Playbook

The message is simple: invest while others are fearful, sell when they get greedy.

It’s 2011 all over again, only this time you know what’s coming.

Are you a top-tier sponsor with a clean balance sheet, a long-term view, strong investor networks, and a proven track records?

If that sounds like you, and you agree with the general thesis of this newsletter, let’s talk. I can help you raise the capital you need, provide strategic and tactical guidance grounded in decades of experience and a wide industry perspective, and position you to capture the full upside of the coming cycle.

The time to act is now.

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Coming Up

In the next few issues, I’ll cover:

• How to manage investor sentiment and attract capital even while others are struggling.
• How to profit during the upturn and position for the next downturn.
• Creative ways to find opportunistic deals others will miss.

If you’re a seasoned shop with a solid investor base and proven track record but are struggling to raise equity for deals that pencil, stop waiting for the market to change, reach out.

I’ll show you how to unlock the capital you need to lead the recovery, build a resilient portfolio, and stay positioned when today’s favorable conditions inevitably fade.

Best,
Adam

n.b. Regarding the likelihood that interest rates for CRE will fall as the Fed Fund Rates (FFR) comes down (as it is already is beginning to), the chart below shows historical relationship between the FFR and the 10-year Treasury:

The link between the Fed funds rate and the 10-year Treasury yield changes depending on the broader economic environment. When inflation is high and the Fed is raising rates, the two usually move closely together; long-term rates rise as markets expect more hikes.

When the Fed starts cutting rates, long-term yields often fall too, but not always by the same amount, because investors are also watching inflation, government borrowing, and global demand for U.S. debt.

In calmer or low-rate periods, the connection can weaken a lot. In short, the 10-year tends to follow the Fed’s direction, but how much and how fast depends on what’s happening in the economy at the time.

PS. would love to hear your view on this topic. I've written a shorter version on LinkedIn.

​Chip in with your thoughts there, if you have a moment >>​

This week's Podcast/YouTube show

Guest: Sean Burton, CEO, Cityview

Where Capital Is Flowing

Sean Burton runs a fully integrated multifamily platform: Cityview develops, acquires, and manages apartments across supply-constrained U.S. markets, with deep West Coast exposure and outposts in Dallas, Denver, and the East Coast.

The firm built its model the hard way, by taking assets back in the GFC, deciding it “wasn’t close enough to the real estate,” and spending a decade integrating development, construction management, and property management in-house.

The result is a 200-person owner-operator with line-of-sight from entitlement through stabilized operations that has developed or owned over 20,000 units valued at over $6.5 billion.

For sponsors and LPs, Burton’s vantage point is valuable: Cityview is simultaneously raising, building, operating, and selling across a 40-asset portfolio. That produces a clean read on what capital will fund, what costs are doing, and which policies actually move supply.

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​Debt Markets: Spreads Have Washed Out

The most immediate tailwind is on the liability side. Private credit raised vast sums with promises to deploy; now those managers “are really scrambling to do that.”

Spreads have compressed to cycle lows, even by long-tenured practitioners’ standards, while large banks, sidelined by capital rules, are “running back into the space.” For borrowers with relationships and credible pipelines, that mix is pushing all-in costs down and improving returns.

The caveat is macro: underwriting still hinges on the long end of the curve. Rate-cut chatter is noise unless it changes the 10-year; that remains the industry’s risk-free anchor and the practical link to cap rates.

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​Equity Sentiment: From First-Quarter Thaw to Post-Tariff Pragmatism

Fundraising whipsawed this year (2025). Optimism built early; geopolitics and “Liberation Day” headlines knocked some LPs back to the sidelines, particularly internationals. Since summer, flows have stabilized.

Two shifts matter:

1. Development is bankable again in supply-constrained markets as value-add competition and tighter cap rates narrow the gap to build yields. Insurance capital, bulge-bracket managers (the largest of the large banks or asset managers), and selective foreign LPs are leaning in.
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2. Coastal markets are back in the conversation. After Covid-era “California is uninvestable” narratives, Burton reports LPs are reassessing the resilience of constrained, high-demand submarkets.
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Costs, Tariffs, and Immigration: Risk Management over Drama

Burton’s team pressure-tested a 500-unit West LA project against worst-case tariff scenarios by calling 17 top subs and materials providers directly. The outcome: roughly +2.7% on hard costs and +1.5% on total budget - these are material but hardly thesis-breaking.

At the same time, fewer new projects are starting, so subcontractors are competing harder for work and materials prices are easing which helps offset the cost pressures everyone’s worried about.

Immigration enforcement created anxiety on jobsites but produced minimal disruption on large, union-compliant multifamily builds.

The lesson for sponsors: interrogate supply chains one layer deeper than your GC and quantify impacts deal-by-deal. In many cases the “big scary” is a rounding error next to land, entitlement time, and capital cost.

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​Opportunity Zones: The Rolling, Evergreen Version Starts in 2027

Cityview incubated a $1 billion Opportunity Zone program during the first regime and expects to re-launch in 2027, when the new, broadened framework begins.

Two features matter for investor pipelines:

1. Evergreen/rolling design replaces a sunset cliff, enabling steadier programmatic planning.
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2. Expanded eligible income categories (beyond capital gains) are anticipated once Treasury finalizes regulations.

Sponsors should treat 2026 as a bridge year and align site control, design, and capital partnerships now to hit the 2027 window with shovel-ready projects.

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​Policy and the Cost of Capital: Beware the “Sugar Rush”

Burton is pragmatic about deregulation and lower policy rates: more liquidity lowers financing costs and ultimately rents but could overshoot.

If easier credit lifts inflation fears, the 10-year treasury could rise, blunting the benefit. Institutional investors should welcome the return of liquidity, but model a range of outcomes for interest rates and cap rates instead of assuming a smooth recovery.

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​Underwriting Discipline: Financial Engineering is Not a Strategy

The most actionable part of the conversation is Burton’s insistence on fundamentals over financial engineering. In his words: “it really does start with the real estate.”

Teams that chase structures or build value stories around fee waterfalls, hybrids, or momentary rate arbitrage, inherit fragility when regimes change.

The sustainable edge is still site quality, transit and job access, and demonstrable supply constraint.
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Los Angeles: The Policy Spread

If capital is global, local politics price assets more than many pro-formas admit. Investors who “love LA” balk at uncompensated political risk: rising fees, shifting rules, and entitlement uncertainty.

The city can narrow its risk spread by lowering soft costs and delivering predictable timelines. San Diego’s “Complete Communities” framework is a working case study: clear rules, 30-day comments, and mayoral support, paired with meaningful affordability requirements, are unlocking 1,000-unit pipelines for platforms like Cityview.

Predictability, not subsidies, is doing the heavy lift.

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​Signals to Watch (Next 12–18 Months)

• Demand indicators:
  ​job creation by sector, consumer spend, white-collar hiring (Bay Area/IPOs), and migration into select Sun Belt nodes.
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• The 10-year treasury:
  more decisive for cap rates and development feasibility than near-term policy cuts.
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• Agency reform path: potential Fannie/Freddie privatization and its implications for multifamily liquidity and cost.
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• Starts and costs: continued slowdown in starts should relieve input costs; track sub bids and lead times monthly.
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• Local entitlement velocity: municipalities emulating San Diego’s timeline discipline will attract outsized capital.
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What Sophisticated CRE Participants Should Do Now

1. Stage development in true supply-constraints where entitlement risk is manageable and rent elasticity is favorable.
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2. Exploit today’s spread compression but size interest-rate hedge/exit scenarios off the 10-year, not the dots.
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3. Re-engage HNW/Opportunity Zone channels with an explicit 2027 go-to-market plan; 2026 is for control and design.
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4. Price policy risk explicitly in hurdle rates; where cities cannot deliver predictability, pivot to jurisdictions that can.
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5. Enforce fundamentals-first governance in IC memos - deal quality over structure cleverness.

The through-line of Burton’s view is sober optimism: capital is returning, costs are manageable, and the demand story for housing is intact - provided teams keep their eye on the 10-year and underwrite to the dirt, not the spreadsheet.
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​Watch/listen to full episode here.

​Please join the conversation on LinkedIn, here.​

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

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