News
News to know
News to know
Iran conflict sparks new surge in CRE construction costs | GlobeSt, April 13, 2026
The war in Iran has sent energy and materials costs sharply higher, adding a new layer of pressure to an already strained CRE construction market. Diesel prices hit $5.643 per gallon in early April, up 55.1% year-over-year, while commercial electricity averaged 13.64 cents per kilowatt-hour in January, up 6.4% annually. Aluminum imports are being disrupted by Gulf supply constraints and compounded by a 50% tariff on aluminum, steel, and copper-heavy goods imposed in April 2026. From February 2020 to February 2026, final demand for private construction rose 44.5% against 26% overall inflation, and AGC chief economist Ken Simonson warned that more owners will pull back on project starts if cost pressures persist.
Housing shortage is at least 10 million homes, White House says | Bloomberg, April 13, 2026
The Council of Economic Advisers released a new estimate putting the U.S. single-family housing shortage at 10 million or more units, higher than prior government and private sector figures, including Freddie Mac’s 2024 estimate of 3.7 million and NAR’s 2021 estimate of 5.5 million. The report argues that if homebuilding had maintained its historical pace rather than collapsing after 2008, the gap would not exist. The release comes as policymakers ramp up housing efforts ahead of midterm elections: the Senate passed the Housing for the 21st Century Act on an 89 to 10 vote, and President Trump signed two executive orders in March aimed at easing mortgage credit and streamlining environmental review for development. The administration also directed Fannie Mae and Freddie Mac to purchase $200 billion in mortgage bonds, which briefly lowered rates before the Iran conflict pushed them back up. The 30-year fixed mortgage rate currently stands at 6.37%, more than double levels from five years ago.
Nearly 60 million square feet of life science space was delivered across 11 U.S. hubs between 2020 and 2025, but more than half remains vacant, according to Savills. The overhang is sharpest among recent completions, with 73.4 percent of 2025 deliveries still available and 34 buildings completed since 2023 without a single tenant. Boston-Cambridge and the San Francisco Bay Area account for roughly 58 percent of total deliveries. Reduced venture capital funding, federal research cuts, and tariff-related drug pricing pressure have led tenants to scale back, pushing vacancy above 20 percent in several major markets and driving landlords toward heavier concessions. Savills noted that conversions of lab space to other uses remain limited due to specialized infrastructure costs, and that the sector’s long-term outlook is supported by advances in mRNA, gene editing, and AI-driven drug discovery.
New York City developers are splitting large apartment projects into 99-unit pieces to avoid stricter requirements under the 485-x tax program, which imposes a $40 per hour construction wage floor and additional affordable housing mandates on buildings with 100 or more units. At least 42 such projects are in development across Brooklyn, the Bronx and Queens. Permit applications for 50 to 99-unit buildings tripled in 2025 relative to the prior five-year average. Construction lender S3 Capital has financed more than 50 projects under the program, none above 99 units. The practice is legal but has drawn union opposition, and city officials said they are reviewing the issue. NYC multifamily starts were 38% lower in Q1 2025 compared to the year-ago period before 485-x took effect.
AI boom brings new office demand, but not for long | GlobeSt, April 15, 2026
AI and related industries are generating pockets of new office demand today, but Newmark projects the effect will fade by decade’s end as automation reshapes knowledge work. The firm’s base case forecasts office-using employment growth of just 0.3% from 2026 to 2030, with the national vacancy rate edging up roughly 10 basis points to about 21.5%. Alternative scenarios range from 19.5% vacancy in the best case to 23.5% in the downside view. Current demand remains concentrated in the San Francisco Bay Area but is spreading to Manhattan, Seattle, Los Angeles and Austin. Entry-level and routine office roles face the greatest displacement risk, while higher-skill, relationship-driven positions are more likely to be augmented than replaced. Newmark expects generic back-office environments to face the most pressure, while modern, collaboration-oriented properties in strong locations with diverse tenant mixes are better positioned to outperform as the structure of work evolves.
US equity REITs raised $2.27 billion in March, down 68.1% from February and 60.0% year over year, split between $1.47 billion in common equity and $800 million in debt. Healthcare REIT Janus Living led with $966 million through its IPO at $20 per share, with net proceeds directed to parent Healthpeak Properties for acquisitions. Service Properties Trust raised $500 million via a follow-on at $1.20 per share to redeem near-term debt, and Realty Income issued $800 million in 4.750% notes due 2033. By sector through Q1, retail led at $3.26 billion, followed by specialty at $2.60 billion and office at $1.75 billion.
Historic LIHTC expansion widens financing gaps for developers | Bisnow, April 16, 2026
The OBBBA increased 9% LIHTC allocations by 12% starting in 2026 and lowered the private activity bond threshold from 50% to 25%, changes Novogradac estimated could finance 1.2 million additional affordable units over the next decade. But the larger credit supply has pushed per-credit equity pricing down to around 84 cents nationally, with wider dispersion across deals. Developers receive thinner equity proceeds and must rely more on gap financing. Doubled investment caps at Fannie Mae and Freddie Mac have not yet translated into new capital, and softer multifamily fundamentals, including a 1.7% annual rent decline per Apartment List, are adding pressure. The 21st Century Road to Housing Act, now moving through Congress, could help by expanding bank participation in LIHTC investments.
