Today’s Valentine’s Day love letter goes out from JPMorgan to the build-to-rent sector.

J.P. Morgan Asset Management is partnering up with Georgia Capital and its affiliate, Paran Homes, to launch Laseter Development Group, a build-to-rent development firm focused on the Southeastern U.S. It has two projects set to break ground this year totaling 291 homes in the suburbs of Atlanta and Nashville.

"This initiative underscores our strategic focus on the BTR asset class and reinforces our commitment to this high-conviction sector," said Chad Tredway, head of Real Estate Americas at J.P. Morgan Asset Management. "Demographic shifts and job growth in the Sunbelt are driving increased demand for single-family housing. With Millennials seeking more space and housing prices at record highs, many are turning to rentals, fueling the growth of this sector."

Build-to-rent, a segment of single-family rentals in which institutional owners build communities from the ground up to rent them out long-term, is less than a decade old in the U.S. as an investment class, but it has been booming. 

Just under 1 in 10 homes that broke ground in the U.S. last year were intended for rent. More than $66B has been poured into SFR in the last four years, and nearly 125,000 SFR units have been built since 2017. 

The growth in the space has regulators worried, though, and the FTC proposed a probe in January to suss out the impact of broad institutional ownership on the housing market. 

“As Americans face a housing shortage and pay soaring rents, it’s vital to understand the role played by large institutional investors,” outgoing Federal Trade Commission Chair Lina Khan said.

— Catie Dixon, Jay Rickey, Mark F. Bonner and Kayla Carmicheal

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CRE News Quiz

The Strategic Withdrawal of Agencies for Meaningful Placement Act, or SWAMP Act, aims to decentralize government operations and relocate them around the U.S. What agencies are exempt from the relocation mandate?

(Answer at the bottom.)

On Our Radar

• Construction costs spiked 1.4% in January as tariffs loomed. According to a new Associated Builders and Contractors report, construction material prices saw their sharpest monthly increase in two years, jumping 1.4% as contractors rushed to buy ahead of Trump’s tariffs on imports from Canada, Mexico and China. Energy costs drove the surge, with crude petroleum up nearly 15%, natural gas rising 13.7% and steel products surging over 10%. New 25% tariffs on steel and aluminum, set for March, could push prices even higher. “Tariffs are the only [factor] that could continue to push input prices higher in the coming months,” ABC Chief Economist Anirban Basu said.

• U.S. retail sales dropped more than expected in January. Retail sales fell 0.9%, well below forecasts, amid severe winter storms and LA wildfires. Excluding autos, sales dipped 0.4%. Nine of 13 categories saw declines, including vehicles, sporting goods and furniture. Beyond the ice and fire, consumers face stubborn inflation, high borrowing costs and rising delinquencies — but analysts saw no sign of tariff-driven spending shifts. For what it’s worth, eight out of every 10 consumer dollars are still spent in a store. The pandemic, and whatever this economic period will be branded, didn’t kill brick-and-mortar retail.

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Today’s Deep Dive: How Private Equity Is Leveraging Life Insurance To Increase Its CRE Foothold

In the pursuit of growth, the tentacles of private equity have infiltrated the balance sheets of nearly every sector of the real estate industry. Most recently, they’ve grasped onto one of its largest sources of capital: life insurance companies. 

The partnerships between the two players have changed the financial ecosystem and are only likely to increase. But the surge of investment from private equity into life insurance and private credit doesn't necessarily mean there is more capital available for commercial real estate, market insiders tell Bisnow. 

It just makes the arms of private equity hard to avoid, even as banks return to the table.

“This is not that a truck just backed up and dumped a bunch more money into the real estate space. That's not the case. What the case is, it's moved,” JLL Executive Managing Director and Debt Platform Leader Trey Morsbach said. “It’s the evolution of capitalism.”

Read the full story here.

This Morning’s News

RETAIL — Unibail-Rodamco-Westfield Says It Won't Sell Its Top Malls (Bisnow): The European mall conglomerate has decided against breaking up its U.S. business. In 2022, the company said it would offload its $13.2B U.S. portfolio due to finances, investor pressure and pandemic struggles. However, divestment slowed over time, and the company has decided to retain its portfolio. Read more here.

INDUSTRIAL — Small Warehouses In Short Supply (WSJ): The vacancy rate for U.S. warehouses under 100K SF was under 4% in Q4. The overall vacancy rate was 6.7%. Less than 10% of new warehouses built in 2024 were under 100K SF. Read more here.

INDUSTRIAL — Mega-Distribution Center Leases Increase (World Property Journal):  There were 49 mega-distribution center leases of 1M SF or more in 2024, up from 43 in 2023. Megaleases declined in 2023 after peaking at 61 in 2022. Read more here.

HOUSING — Federal Bill Could Cut Eviction Notice To One Day (NYT): Proposed legislation would strip away tenant protections put in place during the pandemic, allowing landlords to evict tenants with just 24 hours' notice in some cases. Read more here.

RETAIL — Bankrupt Craft Retailer Joann To Close 500 Stores (Bisnow): Joann Fabrics announced plans to shutter approximately 500 of its 800 stores nationwide following its second Chapter 11 bankruptcy filing within a year. The closures, pending court approval, aim to address underperforming locations and are part of the company's strategy to find a buyer and repay over $450M owed to lenders. Read more here.

HOUSING — Landlord-Friendly Market Ahead (WSJ): The new construction pipeline will be mostly drained by the end of 2025, allowing rents to rise across the U.S. this year. This would complicate the inflation picture and could give the Fed another reason to halt future rate cuts. Read more here.

INVESTMENT — KKR Raises $850M For Real Estate Credit Fund (Bloomberg): Private equity giant KKR has secured over $850M for a new real estate credit fund. It will purchase certain tranches of CMBS and back first mortgages in U.S. and European properties. Read more here.

PEOPLE — Airbnb Co-Founder Set To Join DOGE (NYT): Billionaire Joe Gebbia co-founded Airbnb in 2008. He also co-founded Samara, a startup that designs and manufactures accessory dwelling units. Read more here.

HOTELS — TGI Fridays Shifts Focus To Hotels (CoStar): The casual dining chain is leaning into franchising and hospitality partnerships to drive future expansion. The parent expects to emerge from Chapter 11 this year without any corporate-owned locations. Read more here.

OFFICE — Got $28M In Bitcoin? This NYC Office Building Could Be Yours (Bisnow): A 47K SF office building at 111 W. 24th St. in Manhattan's NoMad neighborhood has been listed for $28M, with the owner willing to accept payment entirely in cryptocurrency. It is the only commercial property in NYC known to accept crypto. Seller Okada & Co. said it has received two offers within a month of listing. Read more here.

DATA CENTERS — Trump Plans Changes To CHIPS Act Conditions (Reuters): A source said the White House is frustrated that some companies announced overseas expansions – including in China – after accepting CHIPS Act subsidies. The law allows for some investments in China. Read more here.

BROKERAGE — Marcus & Millichap Posts 44.5% YOY Revenue Jump (Marcus & Millichap): The brokerage reported a strong Q4, with revenue reaching $240.1M. Read more here.

BROKERAGE — Newmark Revenue Jumps 18.9% YOY (Newmark): The firm reported $888.3M in Q4 revenue, exceeding estimates by $97.5M. Read more here.

REITs — Digital Realty Lowers 2025 Revenue Outlook (Reuters): Digital Realty expects 2025 revenue to be between $5.8B and $5.9B, compared with analysts' average estimates of $6.1B. The REIT says businesses are cutting spending on cloud-related services over concerns about a slowing global economy. Read more here.

REITs — Federal Realty Beats FFO Expectations (Investing.com): Federal Realty said it expects annual FFO per share to be between $7.10 and $7.22. Analysts expected $7.00. Read more here.

ENERGY — Power Demand Surge Equivalent To New California (Seeking Alpha): U.S. power consumption is projected to skyrocket through 2027. Read more here.

IMMIGRATION — Undocumented Workers Helped Build Musk’s Texas Gigafactory (Bloomberg): Undocumented workers are the lifeblood of construction, especially in border states such as Texas, where almost a quarter of the construction workers lack authorization to work. Read more here.

ESG — Low-Carbon Concrete Reaches Tipping Point (Fast Company): Startups are racing to bring low-emissions alternatives for producing cement to market. Producing cement accounts for 8% to 9% of global emissions, three times as much as aviation. Read more here.

REITs — BXP Pushes Sustainability As A Workplace Differentiator (Nareit): The office REIT is positioning itself as a leader in environmentally friendly and premier office spaces to attract top tenants. Read more here.

REITs — Ventas Disappoints With 2025 Guidance (Seeking Alpha): Ventas closed on more than $2B of investments in 2024, primarily focused on senior housing. Read more here.

DEVELOPMENT — Denver’s Proposed Retroactive Gas Station Ban Threatens Investments (Bisnow): The ordinance would prohibit new gas stations within a quarter-mile of existing fueling stations and rail transit stations, as well as within 300 feet of residential areas. Denver city council argues these sites could be used for affordable housing instead, but the retroactive enforcement has developers up in arms. Read more here.

HOUSING — Miami’s Luxury Homes Surge, Entry-Level Housing Vanishes (WSJ): The number of annual single-family home sales in Miami-Dade County below $500K dropped 79.6% from 2019 to 2024. Read more here.

GAMING — Top 7 Video Games Featuring Real Estate Development (Game Space): These 7 video games let you construct entire cities, manage properties and develop your own business empire. Read more here.

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So You’ve Come For An Answer

Defense and intelligence agencies.

The Executive Office of the President, the CIA, the Departments of State, Defense and Energy, and other bureaus in the national security space would be exempt from the relocation requirement. 

Do you think you have a harder CRE news question? Email us. Take your best shot and we may feature you and your question in this space.

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The First Draft is produced by Director of Newsletters Jay Rickey, Managing Editor Catie Dixon, Editor-in-Chief Mark F. Bonner and Deputy Newsletter Editor Kayla Carmicheal, with an assist from AI. We’d love your feedback! Email us at firstdraft@bisnow.com.