?? Why office, multifamily are set to thrive in 2025

???Hello, Best Ever readers! In three weeks, it will be 2025, the time until which we were told to survive. Get your popcorn ready ??

In this week’s newsletter, job growth boosts key CRE sectors, immigration reform threatens construction, and one investor sees 20% office rent growth.

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?? NO-FLUFF NEWS: CRE HEADLINES

???Future of Fannie, Freddie: Trump's re-election has revived plans to privatize Fannie Mae and Freddie Mac, sending their stocks soaring since November 5. The move could reshape the $11T mortgage securities market, where the agencies control $310B in daily trading through federal guarantees.

???Industrial Slowdown: Industrial construction is sharply declining, with only 358.8M sqft under construction (1.8% of existing stock), following 2021-22's record 1.1B sqft delivery. Phoenix leads new construction at 6.7% of stock, while Dallas starts dropped to 13.3M sqft from a 42.6M annual average.

???Betting on BTR: Wall Street firms are heavily investing in build-to-rent single-family homes, targeting renters priced out of homeownership by high rates and offering upscale homes with amenities that appeal to would-be buyers seeking alternatives to traditional apartments.

?? ADU Expansion: California has passed a landmark bill that expands ADU development rights, allowing up to eight detached units on multifamily properties. Building on the state's 80,000+ ADUs built in seven years, the law offers a blueprint for addressing housing shortages.

??? 20% Rent Growth?!: Former hedge fund manager Joshua Sason says his portfolio has seen up to 20% rent growth and stable concessions in carefully positioned "best-in-class" office assets, despite broader market challenges. He joined host Amanda Cruise on the Best Ever CRE Show this week to share the how and why behind it.

?? TOP STORY: WHY OFFICE AND MULTIFAMILY COULD THRIVE IN 2025

The office and multifamily sectors appear poised to end 2024 on a high note and enter 2025 with an uptick in momentum, largely due to a thriving labor market.

Hiring hit a six-month high in November after weather and labor-relation disruptions led to a down October. The rebound of 227,000 net new roles in November, combined with the prior period's 36,000 job addition, resulted in an average gain of 131,500 over the two-month period.

This clocks in lower than the 191,000 average for the first nine months of the year and from what was typical pre-pandemic norms, but November’s strong showing proves October to be an anomaly and signifies the labor market, though softening (unemployment edged up 10 basis points to 4.2% in November), remains strong...