⚠️ CRE risks amid AI boom
🕹️ Invest in Atari’s gaming-themed Phoenix hotel for $500
🌴Trader Joe’s doubles down on SoCal retail
📚 January Workshops: 2026 Business Models & Trends, Selling into CRE, Family Office Fundraising

Data Viz of the Week: Build More, Rents Fall

The past five years have shown that building more housing—even luxury housing—puts downward pressure on rents. The cities that built the most housing such as Austin, Nashville, Raleigh, and Denver, for example, saw some of the largest drops in rents.

This piece in Bloomberg illustrates the point. Will cities listen?

Upcoming Thesis Driven Courses & Classes

• January 7-8: Workshop: Evaluating Emerging Real Estate Business Models  (💻 Online): A two-day interactive workshop exploring how we at Thesis Driven evaluate emerging real estate business models—and some of the best opportunities we see for 2026 - $99

• January 12th: 5-Week Course: Master Selling into Real Estate Owners (💻 Online): A 5-week bootcamp for people selling technology and products into the real estate industry - $1,299

• January 14-15: Workshop: Raising Capital from Family Office (💻 Online): ​A two-day interactive workshop designed for real estate sponsors, entrepreneurs, and capital raisers looking to raise capital from family offices. - $499

Three Articles We Loved from Last Week

It’s not easy keeping up with everything. Here are three articles we loved from the past week that you may have missed:

1. (WSJ) The AI Boom Is Opening Up Commercial Real Estate Investing to New Risks

   As demand for data centers tied to AI infrastructure skyrockets, real estate investors are shifting capital away from traditional property types—offices and retail—toward hyperscale compute facilities. Data centers returned roughly 11.2% last year, second only to manufactured housing, and firms are projecting up to $1 trillion in North American data center construction by 2030. Yet the rapid build-out carries unique risks: tight power contracts, specialized supply chains, labor shortages, and penalties tied to performance metrics could compound vulnerabilities if AI demand suddenly slows.

2. (CoStar) Atari Hotel Phoenix Project Raises Capital via Public Investment

   The long-awaited Atari Hotel project in Phoenix is moving forward with developers launching an SEC-backed Regulation A fundraiser that allows retail investors to own interests with contributions as low as $500. The $124 million hospitality and entertainment complex—themed around retro gaming and esports—aims to break ground in early 2026 for a 2028 opening, reflecting growing niche experiential hotel concepts that blend lifestyle, gaming and pop culture. 

3. (The Real Deal) Trader Joe’s Grabs Santa Monica Rite Aid for $22M

   Trader Joe’s continues its aggressive real-estate expansion, purchasing a former Rite Aid site in Santa Monica for $22 million. The deal highlights a broader trend of infill retail repositioning as legacy pharmacy chains shrink, leaving well-located properties available. Despite broader retail challenges, grocers and experiential tenants are swooping in on high-demand urban real estate, often paying premium pricing at a time when rents have softened on average.

Developer of the Week: Shoma Group

Florida's Live Local Act is starting to hit.

South Florida-based Shoma Group submitted plans for a new 16-story mixed-use development in Coral Gables. The proposal calls for 201 residential units and nearly 5,000 sq ft of ground-floor retail, replacing one-story commercial buildings and surface parking. Shoma agreed to designate 40% of units as workforce housing, making the development eligible under Florida’s Live Local Act, which incentivizes increased density and height in exchange for affordable and workforce units.

Designed by Pascual, Perez, Kiliddjian & Starr Architects, the project features a Mediterranean architectural style, a pool, clubhouse, and 345 parking spaces.

You can read more about Rabina on the Thesis Driven GP database here.

Know about a developer doing something cool? Reach out to [email protected] with the tip!

Investor of the Week: Palatine Capital Partners

Palatine Capital Partners is a real estate investment firm focused on value-add and opportunistic strategies across U.S. real assets. The firm targets industrial, multifamily, and single-family investments, while also allocating capital to niche and underfollowed property types where complexity, fragmentation, or operational inefficiency create outsized return potential. Palatine partners with experienced operators and sponsors, positioning itself as a flexible capital provider across a range of deal structures and market environments.

Within real estate, Palatine emphasizes sub-sectors such as self-storage, senior housing, student housing, and parking assets, alongside core exposure to industrial and housing. The firm’s approach is thesis-driven and hands-on, leaning into situations that require creative underwriting, repositioning, or operational improvement. Palatine is comfortable operating across the capital stack and typically seeks alignment through value-add execution rather than passive, core exposure, making it well-suited for transitional assets and growth-oriented platforms.

Get more details on Palatine, including team contacts, deal activity, and investment preferences, inside the CapitalStack database.

—Brad and Paul