Tariffs, Occupancy, and the Reshaping of Asset Pricing
Debt yields are reshaping asset pricing. If you’ve been watching cap rates press against long-dated Treasuries, you’ve seen the spread narrow to levels not observed since 2006.
Not all asset classes are created equal. Industrial and multifamily continue to exhibit durable demand, while office and select retail face structural headwinds. Investors are repricing risk with higher cap rate cushions, emphasizing proven rent growth over speculative pro-formas.
SECTOR FALLOUT
Lease-up cycles have elongated. The winners are those who can reposition assets quickly.
VALUE THEMES
Distress‑driven opportunities also surfaced. Pacific Retail Capital Partners quietly took over the deed and senior loan of Resurgens Plaza in Atlanta via a deed‑in‑lieu transaction after the prior $89.7 million loan matured, giving the Los Angeles‑based investor control of an 18‑story office tower at a valuation of roughly $77.4 million. Such REO situations remain isolated, but they hint at a growing pool of opportunistic office buyers. Meanwhile Glacier Global Partners and Next Century Self Storage formed a programmatic joint venture to acquire and manage self‑storage properties nationwide; executives signaled a long‑term, data‑driven strategy for scaling acquisitions. Overall, the week’s activity underscores a flight to sectors with strong fundamentals (industrial, self‑storage and grocery‑anchored retail), the continuing appetite for credit vehicles that can fill a liquidity gap, and early moves by opportunistic buyers of distressed assets. Credit selection and rollover matter more than ever. We focus on stabilizing properties to maximize yield and long-run value creation.