🚨 Multifamily mortgage scandal rattles the CRE world (Real Deal)
↘️ Office space is finally shrinking (WSJ)
🏛️ CRE cheers as the Senate revives tax breaks (CRE Daily)
📚 Upcoming courses for Capital Raising & CRE Fundamentals

Data Viz of the Week: NYC Banned Broker Fees and the Rent Went Up

Economists often theorize about what might happen when a given policy is implemented. If a new law prohibits a business from charging one type of fee, the theory goes, the cost is still passed through to consumers in other forms.

But rarely is the connection between theory and reality so glaring as the current situation in NYC. On June 11th, the FARE Act—which bans brokers from charging fees to tenants—went into effect.

Over the following two weeks rents jumped by almost 20%, largely eliminating any savings tenants would’ve seen. In fact, this is likely an even worse situation as tenants are stuck with higher rents on renewal, penalizing anyone who wishes to stay long-term.

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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. (The Real Deal) Fraud schemes, falsified income, straw-man flips

   A nationwide multifamily mortgage fraud scandal—potentially totaling billions—has emerged, with Fannie Mae flagging $700 million tied to eight blacklisted sponsors. This echoes 2008’s housing meltdown, but now skews toward apartment complexes rather than single-family homes.

2. (WSJ) Developers Are Finally Dealing With the Office-Oversupply Problem

   U.S. office supply is contracting for the first time in 25 years, thanks to a wave of conversions, demolitions, and halted construction. With national vacancy still hovering near 19%, this marks a turning point in solving America’s office glut.

3. (CRE Daily) Senate Narrowly Passes GOP Tax Bill with Major Real Estate Wins

   The Senate greenlit a tax package that brings critical deductions and incentives back into CRE, pleasing developers, landlords, and investors who’ve been lobbying for relief.

Developer of the Week: Digital Realty

Few developers have benefitted as much from the data center boom as Digital Realty.

And they’re now filing to build a new, 400MW data center just west of the airport in Charlotte, North Carolina. Digital Realty is now an almost $50 billion market cap REIT with more than 300 data centers across 50 metro areas.

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

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

—Brad and Paul