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Tariffs Could Shake Up West Coast Apartment Boom link

• Over 585,000 new apartments hit the U.S. market in 2024, marking the national peak, but cities like Riverside, San Jose, and Bakersfield are still ramping up, with peaks expected by end of 2025. Los Angeles, San Diego, and Anaheim are projected to peak in 2026.

• Construction timelines are already slipping in major metros like LA, partly due to tariff-related cost pressures on building materials. These delays could push peak supply further out or reduce final unit counts.

• Markets that missed the 2024 boom may face oversupply risks just as national demand cools, especially if tariffs inflate costs or stall new projects mid-build.

Yardi trends for Multifamily link

• U.S. multifamily rents rose by $6 in May 2025, bringing the national average to $1,761. That’s a modest 1% year-over-year increase, signaling steady (but slowing) rent growth.

• Despite heavy new construction, demand is holding up—especially in high-supply markets where vacancy is rising slowly rather than sharply.

• Economic uncertainty hasn’t shaken the sector much yet, with Yardi reporting fundamentals like rent levels and occupancy remain largely stable.

• click on the link to see the list of cities.

Student Housing Rents Slide as Preleasing Stays Strong link

• Preleasing hit 73.2% in April across Yardi 200 schools—up 140 basis points year-over-year—but 21 campuses are still under 50% leased, mostly in smaller markets like UT–Arlington and Houston. Alabama, Mizzou, and Virginia Tech are leading with over 90% preleased.

• Average rent dropped to $917 per bed, the first monthly decline since August 2024. Year-over-year rent growth slowed to just 2.0%, down from 6.4% in previous leasing cycles, with places like Tennessee and Arizona State seeing declines over 6%.

• Only 28,454 new beds are expected for fall 2025—down sharply from 36,306 in 2024 and over 44,000 in 2023—signaling a shrinking development pipeline. Yet, investment is holding steady with 27 properties sold through April at an average price of $74,207 per bed.

Impact of AI on Commercial Real Estate link

• Industrial and data center demand is climbing fast, with AI adoption and e-commerce driving up the need for warehousing and logistics space in tech-connected cities. These sectors are now some of the most active in the CRE market.

• 78% of organizations were using AI by the end of 2024, up from 55% a year earlier, and that’s reshaping real estate decisions—especially for companies locating near top schools and VC hubs like the Bay Area.

• Despite the upswing, tariffs and global supply chain issues are pressuring costs and slowing R&D, posing a risk to startups and potentially cooling future commercial demand in tech-heavy sectors.

AI Is Reshaping Real Estate—from Lease Docs to Data Center Deals link

• JLL Spark is investing in AI tools that digest millions of real estate documents to give leasing teams deeper insights into potential tenants—backing startups like Ren Systems with $3.5M to do just that. This could speed up leasing cycles and improve close rates.

• A major growth opportunity lies in building and managing AI-powered data centers, but developers face challenges like electrical grid access, cooling infrastructure, and lengthy permit processes—areas ripe for specialized software innovation.

• Construction inefficiencies and unpredictable operating costs are still common in real estate. JLL sees targeted AI and vertical software as the next step, moving away from bulky general-purpose platforms like ChatGPT toward real estate-specific tools.

Manhattan office market surges—$2.6B in deals as vacancy drops link

• Office sales in Manhattan hit $2.6 billion across 26 properties by April 2025, a 352.5% year-over-year increase. Properties sold at an average of $439 per square foot—more than double the U.S. average.

• The borough’s vacancy rate dropped to 16.2%, down 70 basis points from last year, and asking rents now average $68.34 per square foot—nearly double the national figure. Major lease renewals include Apollo and Gerson Lehrman, signaling stabilized demand.

• Manhattan leads the U.S. in coworking space with 11.3 million square feet across 278 locations. ElevatedNY, Industrious, and WeWork are expanding aggressively despite lingering post-COVID occupancy shifts.

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Vidit

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