Limon Net Lease Group

Archives for April 2025

Multifamily Well Positioned to Face Economic Headwinds

by

Multifamily Momentum: ​Strong Demand, Tight Supply, and Long-Term Resilience​​

Multifamily Absorption Surges Despite New Supply​

  • Over 145,000 units absorbed in Q1, outpacing 116,000 new deliveries​
  • Vacancy rate declined to 5.0%, lowest since late 2022​
  • Strong demand driven by job growth, favorable demographics, and affordability gap​

Affordability Gap and Construction Slowdown Support Rents​

  • Median home payments near $3,163/month vs. $1,827 for average rent​
  • Multifamily lease renewal rate at 55%, above the long-term average of 53%​
  • Single-family and multifamily construction both slowing due to costs and policy​

Short-Term Risks May Delay, Not Derail, Long-Term Demand​

  • Consumer sentiment dropped to 50.8 in April, may weigh on near-term household formation​
  • Long-term demand outlook remains strong despite near-term volatility​

*Through 1Q​
Sources: Marcus & Millichap Research Services, RealPage, Inc.​

​​​Watch Video Below:

Private Investors Taking the Lead in CRE Investment

by

Market Turbulence Could Drive Capital Toward CRE​

Financial Market Volatility Is Driving Capital Repositioning​

  • Stock market corrected 20% from mid-February to April 8 before partial recovery​
  • Bond market acting abnormally, yields rose instead of falling after tariffs​
  • Rising gold and crypto prices suggest investors are seeking safe havens​

Institutions May Pull Back While Private Investors Step In​

  • Foreign and institutional buyers may reduce CRE activity amid market volatility​
  • Portfolio rebalancing needs could lead some institutions to sell CRE assets​
  • Private investors made up 61% of CRE buyers in 2023, rising from 52% in 2020​

Private Capital Expected to Lead in CRE Investing​

  • Smaller equity funds and syndicators boosting multifamily average​
  • Private buyers likely to stay active as CRE offers long-term value​

Includes apartment, retail, office, industrial, and hotel sales $2.5 million and greater​
Sources: Marcus & Millichap Research Services, Real Capital Analytics​

​​​Watch Video Below:

Financial Market Whiplash vs CRE Investment Durability

by

Tariff Reprieve? Uncertainty Likely to Remain Elevated ​

90-day tariff reprieve, but not for China​

  • Tariffs for most countries set to 10%, China now 145%​
  • 13.4% of U.S. goods imports came from China in 2024 ​
  • Net effective tariff rate now at 27%, highest since 1903​

White House Policy Volatility and Uncertainty​

  • Tariff policies likely to change frequently, raising uncertainty and making decisions more difficult for consumers, businesses, and investors​
  • Uncertainty driving financial market volatility with wild swings in stock market and bond rates​

CRE may be positioned as most durable investment option​

  • Lower volatility, positive fundamentals, recession resistance, and inflation resistance all favor CRE investment ​

Sources: Marcus & Millichap Research Services, S&P Dow Jones Indices​

​​​Watch Video Below:

Market Reacts to Tariffs – Implications for CRE

by

Tariffs Trouble?​

Sweeping Tariff Policy Changes Elevate Uncertainty​

  • New executive order raises the U.S. effective tariff rate from 2.5% to 24%, the highest in over a century​
  • Country-specific tariffs hit China hardest at 54%, with steep rates also imposed on Vietnam, Taiwan, South Korea, Japan, and the EU.​
  • Product-specific tariffs include 25% on steel, aluminum, autos, and potentially pharmaceuticals, semiconductors, and lumber​

CRE Outlook Increasingly Choppy Over Short-Term​

  • Higher inflation and slowing economic growth may slow job creation, spending, and household formation — reducing apartments, retail, and industrial space demand​
  • Tariffs will, however, also increase construction costs, mitigating new supply risk​

CRE Opportunities​

  • Brief window of lower interest rates on debt financing ​
  • Historically, CRE outperforms in times of economic turbulence, rising inflation and financial market distress​

China based on previous 20% tariff imposed​
Sources: Marcus & Millichap Research Services, White House​

​​​Watch Video Below:

Walgreens & Rite Aid Overview

by

Abstract

The RetailStat webinar on March 31, 2025, covered Walgreens Boots Alliance and Rite Aid, focusing on the U.S. retail pharmaceutical market. The U.S. retail pharmaceutical market grew by 8.8% in 2024, reaching $348 billion, driven by higher volume that offset price deflation. Despite overall market growth, retail margins are being pressured by reduced pharmacy reimbursements, soft front-end sales, labor costs, and growing online competition.

Walgreens has faced challenges, including a 52% fall in EBITDA since FY19 and strategic reviews leading to store closures. In March 2025, Walgreens agreed to be acquired by Sycamore Partners in a deal valued up to $23.7 billion.

Rite Aid emerged from bankruptcy on August 30, 2024, eliminating approximately $2 billion in debt and closing 800 stores. However, it continues to face operational struggles and is in talks to bolster liquidity.

Access Summary here

​​​Watch Video here

Courtesy of retailstat.com