👑 The kings of multifamily growth

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In this week’s newsletter, Florida and Texas dominate, DOGE creates chaos, and Trump takes on the housing crisis.

Today’s edition is presented by Capital Gains Tax Solutions. Selling a property shouldn't mean losing 20-50% to taxes. Let Capital Gains Tax Solutions create your personalized exit plan and calculate your savings today.

Let’s CRE!

🗞 NO-FLUFF NEWS
CRE HEADLINES

🛑 Fed Stands Pat: The Fed maintained its benchmark rate at 4.25%-4.50% Wednesday, citing "unusually elevated" uncertainty from Trump administration policies. Despite the turmoil, the Fed still anticipates two rate cuts in 2025.

📈 Construction Crisis: U.S. construction input prices increased 0.6% in February across all sectors, with nonresidential costs surging at a 9% annualized rate in early 2025. While overall prices remain just 0.3% higher YoY, iron, steel, and lumber costs jumped sharply as Trump's tariffs give domestic producers more pricing power.

💼 Office Shift: Back-to-office mandates, increasing occupancy, and declining remote job postings signal a shift toward in-office work. Major employers are implementing stricter attendance policies, spurring a growing demand for trophy space, benefitting A/A+ properties.

☃️ Cold Storage Rebound: Cold storage supply currently outpaces demand, but speculative projects are projected to grow 18.1% annually, expanding the market from $159.7B to $427B by 2030. Development plunged to just 1.1 MSF in 2024 but is expected to double in 2025 as developers target aging facilities.

😵‍💫 ‘Pure Chaos’: DOGE’s push to slash up to 50% of the government's 149 MSF footprint has proved chaotic for CRE. With 793 leases identified for termination, brokers have reported invalid terminations, conflicting messaging, and complete communication breakdowns. The GSA has already reversed 100 termination notices amid the confusion.

🏆 TOP STORY
THE KINGS OF MULTIFAMILY GROWTH

New apartment inventory growth and population growth numbers were published this week, and when combined, they give shape to the multifamily landscape for 2025 and beyond. 

🧑‍🤝‍🧑 Population Growth: Census data released this week shows population growth leaders for 2023-24, and the list of the top 20 — when segmented into markets with populations of 500,000+ — provided some key insights.

• Florida and Texas dominated metro area growth in 2024, claiming 12 of the top 20 fastest-growing markets with populations over 500,000. Lakeland led all larger metros for the second straight year, while Orlando topped the 1M+ category.

• Outside Texas/Florida, strong population growth continues in Sun Belt cities like Huntsville, Raleigh, and Charlotte, as well as Mountain markets like Provo and Boise. Only three metros over 500,000 — Jackson, Memphis, and New Orleans — registered negative population growth.

• Large coastal/Midwest markets showed modest but significant growth, with the NYC metro adding 213,000 people — more than any other market — while D.C., Chicago, Seattle, Boston, and Philadelphia each added approximately 50,000 residents, likely boosted by immigration.

🏘️ Apartment Inventory Growth: Record apartment completions over the past decade saw 12 submarkets grow by over 140%, compared to the national average of 21%, according to RealPage data.

• Texas dominated the list, registering eight of the 12 submarkets growing over 140% in the past decade. Frisco led the way with 238.3% growth with fellow Dallas submarkets Rockwall and Kaufman County also making the list. The Dallas market added 201,000 units overall Houston and Austin followed with 164,000 and 126,100 units, respectively, with three Austin submarkets — East Austin, Cedar Park, and Southeast Austin — making the list.

• Beyond Texas, only one neighborhood in a smaller market — the Boise, Idaho, submarket of Nampa — made the list at No. 3, with Central Nashville, Central Phoenix, and Washington, D.C.’s Navy Yard each falling within the top six.

WHAT IT ALL MEANS

For multifamily investors, metros like Boise and the Florida/Texas markets that register high apartment growth and demonstrate the population growth to absorb it present valuable opportunities. In a multifamily climate littered with oversupply concerns, metros where the population keeps up — especially with the headwinds facing construction and the forecasted decline in deliveries — look more appealing than ever.

💰 CAPITAL GAINS TAX SOLUTIONS
A BETTER WAY TO SAVE ON CAPITAL GAINS TAXES

Selling a property shouldn't mean losing 20-50% to capital gains taxes. And while most investors think their only option is the outdated, restrictive 1031 exchange, there is a better way.

Capital Gains Tax Solutions has helped countless investors preserve wealth through deferred sales trusts. With over half a billion dollars in closed trusts across real estate, businesses, and even Bitcoin, their results speak for themselves:

• A San Diego business owner selling for $13M kept an extra 40% by deferring taxes

• A dental practice owner selling for $16M saved 30% on taxes

• Multiple clients rescued failing 1031 exchanges with Capital Gains Tax Solutions’ specialized exit plans

Don't settle for outdated strategies. The Deferred Sales Trust advantage gives you flexibility, time, and control while allowing your wealth to compound as you slowly pay taxes over time.

But don’t wait! You must act before closing escrow. So if you have an upcoming sale with at least $1M in proceeds or gains, let Capital Gains Tax Solutions create your personalized exit plan and calculate your savings today.

🗺️ ON THE MAP
TRUMP TAKES ON THE HOUSING CRISIS

The Trump administration has proposed using some of the 650 million acres of federal land for affordable housing development. While the idea offers promising opportunities, particularly in Western states, it faces substantial challenges in implementation.

• The Proposal: The proposed task force aims to identify suitable parcels among 650 million federal acres, with analysis suggesting 512,000 acres could yield 3-4 million new homes.

• The Geography: The big problem is that only 7.3% of federal land exists within metro areas experiencing housing shortages. The proposal would primarily benefit Western states like Nevada (80% federally owned) rather than housing-starved coastal markets like NYC (3.4% federal land), with markets like Las Vegas, Salt Lake City, and parts of Arizona showing the greatest development potential.

• Other Challenges: Success also depends on overcoming significant infrastructure limitations, environmental concerns, complex regulatory hurdles across local/state/federal levels, and NIMBY opposition from existing communities.

The initiative's effectiveness will ultimately depend on selecting appropriate locations that balance development potential with infrastructure requirements and environmental considerations. While federal land development alone cannot solve the nation's housing crisis, it could provide meaningful relief in specific markets where federal ownership and housing demand align.

🏠 DEAL OF THE WEEK
~450% LIRR ON A RETAIL PROPERTY IN JUST 11 MONTHS

Bob Thomas of Peak Asset Management achieved a ~450% LIRR on this retail property in just 11 months.

Here's how he did it 👇

🏢 Property Details: Located in Portland, Oregon, the 12,000 sqft single-tenant retail building was purchased in November 2022. It was vacant at the time of purchase.

💸 Finances: The purchase price was $1.075 million ($95 PSF). The debt structure was 75% LTV bank debt. Personal capital was used for the $350,000 total requirement. The ownership was structured as a 50/50 Tenant in Common with one partner.

💼 Business Plan: The building was leased up in 10 months. It was leased to an established local tenant who was adding a location at $18.00/SF/Yr NNN on a 10-year lease with 3.5% annual escalations.

🍾 Results: Bob sold his 50% TIC interest in October 2023 at a total property value of $2.78 million (~7.3% cap). He 1031'd the proceeds into a 50-unit value-add multifamily property. The cap gain (ST) was $750K, representing a ~450% LIRR over the 11-month hold period.

If you have a deal you'd like us to feature, share it with us!

🎓 EXPERT RESOURCES
FREE DOCUMENT DOWNLOAD

What to Consider When Converting Apartments to Condos

Creative exit strategies have become more important than ever, especially in multifamily. Converting apartments into condominiums is one such strategy that can unlock significant value, but it requires careful planning and execution. If you’re interested in this strategy, this quick guide outlines what considerations should be top of mind.