Sunday Summary: ‘People Live in Homes, Not Corporations!’

We certainly don’t cover all the musings of the Developer in Chief, but Donald Trump took to his Truth Social account this week and blasted out a message that his former colleagues in the real estate biz should have taken notice of:

“I am immediately taking steps to ban large institutional investors from buying more single-family homes, and I will be calling on Congress to codify it,” Trump wrote on Jan. 7. “People live in homes, not corporations.”

It was the kind of sentiment that would align the POTUS more with Zohran Mamdani than a lot of his fellow Republicans — or developers, for that matter. This very topic was something congressional Democrats had been grumbling about since at least 2023. But with the power of the presidency behind it, the market’s reaction was swift and panicky: Before the day was out,Blackstone (which has been hoovering up houses for years) saw shares fall 9.3 percent, and shares of American Homes 4 Rent likewise fell 6.3 percent.

“Our ownership of U.S. single-family homes represents about 2 percent of our real estate AUM and 0.5 percent of the overall firm,” a spokesperson for Blackstone told Commercial Observer after Trump’s post. “We have also been a net seller of homes over the last decade — with our holdings down more than one-fifth. That said, we believe our current portfolio is poised to continue to perform quite well and operate at the highest standards for residents.”

SFR is a tricky but intriguing asset class. While the majority of SFRs are still owned and operated by families with just one or two assets, institutional investors have been slowly gorging themselves for 18 years and have become serious players in certain markets. In Atlanta, for instance, 25 percent of the SFR market is in institutional hands. That number is 21 percent in Jacksonville, Fla., and 18 percent in Charlotte, N.C.

“It’s definitely become a mainstream investment group for real estate investors,” said Jen Morgan, partner at law firm King & Spalding, in CO’s long feature on the topic. “The big change is the morphing of deals being done with homebuilders — investors are buying the [build to rent] communities from the homebuilders themselves. … People are now doing planned communities for sale, and they seem to be very popular.”

Housing was also on the minds of New Yorkers, specifically, as Mamdani introduced a number of critical appointments to his administration on this issue.

Cea Weaver, the former executive director of Housing Justice for All, was named the head of the Office to Protect Tenants. (Weaver was swiftly taken to the woodshed after some incendiary tweets came to light.)

Leila Bozorg was appointed the city’s deputy mayor for housing and planning and was subsequently named the head of the LIFT (Land Inventory Fast Track) Task Force as well as co-head of the SPEED (Streamlining Procedures to Expedite Equitable Development) Task Force along with Deputy Mayor Julia Kerson. (The former task force is designed to identify city-owned land that is ripe for development, while the latter is intended to tamp down on bureaucratic hurdles.) And Ahmed Tigani was named the city’s buildings commissioner.

The administration lost no time in immediately trying to stop (or at least slow down) the bankruptcy sale of Pinnacle Group’s 5,000-unit affordable portfolio to Summit Properties USA for $451.3 million.

Steve Banks, the mayor’s corporation counsel nominee, claimed that the city was an interested party in the sale and wanted to protect tenant rights — but a judge denied the motion.

Bad news for investors?

Well, while the aforementioned stories aren’t good for investors, exactly, it’s not like there isn’t quite a bit of money sloshing around, looking for the right project.

“What I am seeing is not pressure or a rush to invest, but rather investors more willing to invest for the right transaction,” said Jay Neveloff, a partner at HSF Kramer. “We have a perfect storm: an abundance of capital prepared to invest in real estate, a market that has stabilized in terms of the ability to be underwritten, and existing deals that need to be refinanced at values that are in some cases lower than when those parties originally invested.”

And in the last few weeks a number of triggers have been pulled on these deals.

The Kuwait Investment Authority, the sovereign wealth fund of Kuwait, just took a juicy $412.6 million stake in Related Companies and Oxford Properties Group’s 70 Hudson Yards (and, on a “related” note, Related and Oxford bought another $52 million apartment building at 467 10th Avenue, in part for its air rights).

If that didn’t impress you, just before Christmas, Related and Oxford closed a $2.45 billion capitalization for 70 Hudson Yards, which would make it the biggest deal of 2025 on a single property.

We can understand the market faith in office — office deals are happening like crazy not just on the big level, but on the granular level, too. Natixis, the French financial services company, took 202,875 square feet at Rithm Capital’s 1633 Broadway. Likewise, law firm Gibson Dunn renewed its 361,569-square-foot space at the Irvine Company’s 200 Park Avenue.

Industry vets like GFP Real Estate, alongside BDT & MSD Partners, are putting their money where their mouths are — they are shelling out $150 million to revamp the 907,000-square-foot 1540 Broadway in Times Square.

And it’s not just New York where the money is splashing about. In the Washington, D.C., area, Nuveen Green Capital (NGC) set a C-PACE financing record (breaking the previous record, also held by NGC) for $465 million in financing for a 15-story office-to-residential development by Post Brothers to convert the Geneva at 1825-1875 Connecticut Avenue NW into 532 housing units.

And JRK Property Holdings spent $1.3 billion in acquisitions last year, capping off 2025 with a $400 million purchase from Equity Residential of 803 units in three different developments in L.A., Seattle and Hoboken, N.J.

Now that 2025 is in the books, it turned out to not be a bad year for proptech investment. Some $16.7 billion was invested in commercial real estate, construction and infrastructure technology last year, according to the Center for Real Estate Technology & Innovation. You can get financing for, like, seven 70 Hudson Yards projects for that!

But the biggest investment question concerns data centers and artificial intelligence.

One could argue that AI has not only saved the San Francisco office market, but has also done wonders for Midtown Manhattan. It has inspired more investment dollars than the mind could possibly conceive.

So … is there a bubble?

Well, probably not yet. The industry is still pretty young. “The projections of data center development by major tech players are truly eye-popping,” said Chris Russo, vice president of the energy practice at Charles River Associates, an economic consulting firm. “But there’s a growing number of questions whether the projections are, in fact, real, and if the investments being made by Meta, Google, Microsoft, among others, can be justified by future revenue.”

To learn more, read our deep dive here.

Sunday reading

As difficult as it might be to believe, it’s been a year since fires devastated Los Angeles.

It’s always helpful to take a look back and see how the city has managed the aftermath of the tragedy. Some 1,448 rebuilding permits for 689 unique addresses have been given in the Palisades as of last Wednesday, and the city has received 3,075 permit applications for 1,400 unique addresses.

“We are standing shoulder to shoulder with local businesses as we restore the community pillars that make our neighborhoods whole,” Gavin Newsom said in a statement on Tuesday. “By cutting red tape and fast-tracking processes that once took months, we’re delivering real, on-the-ground progress.”

Something to think about.

See you next week.