High Temps, High Rates, High Hopes?
Consumer sentiment is up 10%, but recent dips in oil prices have not yet shown up in the inflation data. A recent uptick from the Fed’s preferred inflation gauge supports expectations of interest rate hikes later in the year, but historically speaking, a rate hike environment is correlated with stronger CRE investment returns compared to an easing environment. That is small comfort to the multifamily owners and investors whose returns are in jeopardy due to higher financing costs or a softer for-sale market, but these conditions could generate opportunities for investors eying acquisitions in those select markets with lower supply growth and stable, positive rent growth. Those markets exist, but for now, the lower performance in Sun Belt apartment markets has overshadowed the resilience in the Midwest, where deals remain for cash flow-focused investors.
National YoY Rent Growth Average, May 2026*
-0.20% ↑
* Based on data from RealPage, Zillow, Yardi Matrix, Apartment List, and CoStar
National Occupancy Average, May 2026*
93.7% ↑
* Based on data from RealPage, Yardi Matrix, Apartment List, and CoStar
3.62% ↓
3.64% –
The Apartment Market and the Economy
“Cheering for for Rate Cuts Is Cheering for Lower Returns” : CRE Returns in a New Rate Regime (Newmark)
PCE Inflation Up from 3.8% to 4.1% Year-over-Year (Bureau of Economic Analysis)
The End of Easy Gains in Value-Add Apartments? (GlobeSt)
Multifamily Markets and Reports
Student Housing: Preleasing reached 78% in May and remains ahead of last year’s pace (Yardi Matrix)
Multifamily Construction Momentum is Mixed, but They Keep Building in the Sun Belt (RealPage)
Multifamily and Housing Markets
Home Values Projected to Rise Just 0.1% by the End of the Year (Zillow)
Affordability Concerns Push New Home Sales Lower in May (NAHB)
Mortgage Application Payments Increased in May (Mortgage Bankers Association)
CRE Markets and Reports
CRE Prices Up on Average, but Multifamily Prices Tick Down (MSCI)
Income Is Doing The Heavy Lifting In CRE’s New Cycle (GlobeSt)
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This newsletter is for informational purposes only and do not constitute an offer to sell nor a solicitation to purchase interests in J and G Capital, LLC (the “Company”) or any affiliate or assign nor any other securities. This newsletter is not financial advice, and the and newsletter does not purport to contain all information that is or could be material to an investor in deciding whether to make an investment in the Company. An investment in the Company is subject to a variety of significant risks and considerations that are detailed in the Company’s Subscription Agreement, Disclosure of Investment Risks, Operating Agreement, and related documents (the “Offering Documents”). Prospective investors are advised to review the Offering Documents and consult their own legal, financial, and tax advisors regarding any potential investment in the Company. Subscriptions for an investment in the Company will not be accepted from any prospective investor unless and until such prospective investor has received and fully reviewed a copy of the Offering Documents and has executed and delivered all documents required in connection with such investment. Past performance may not be indicative of future results.