QUARTERLY INSIGHTS Q2 2026

BREAKPOINT ADVISORS INSIGHTS

Big Theme: "Don't wait to buy real estate. Buy real estate and wait." — Will Rogers

Look Back - 1Q 2026

We started the year off with cautious optimism for the CRE sector, and that sentiment remains the same. There’s been ongoing debate regarding multifamily rent growth—we are inclined to believe Mamdani means what he says (more on that in our Look Ahead), while others prefer a wait-and-see approach. On the industrial side, many of our clients were slightly more bullish than reflected in the market, generally evidenced by exit rates coming in approximately 25 basis points tighter. Broadly speaking though, the first quarter felt fairly steady from a value standpoint.

In the first quarter, we also attended the NCREIF Spring Conference and heard from keynote speaker, Tom Kennedy of J.P. Morgan, who has confidence about investing now. A few highlights from his presentation:

• The next five years of CRE investing are unlikely to look like the last five.

• Asset selection matters, not sector selection.

• Office performance turns from drag to driver, but you have to know how to pick them.

• A new world order requires changes to portfolio construction. Look to real assets for diversification.

• CRE offers the best entry point today.

Anecdotally, while at NCREIF we asked many of our institutional clients if they are active buyers this year. The response? Uniformly, yes.

Look Ahead - 2Q 2026

As we move through the second quarter, policy risk, particularly in New York City, has come more into focus. Circling back to Zohran Mamdani and the Rent Guidelines Board: roughly 1.0 million units fall under rent stabilization (distinct from the rent-controlled segment). While these units are often older properties, newer multifamily developments tied to tax breaks and affordability requirements are also subject to the rent growth limits set by the RGB. Determining how this may impact forward-looking 10-year cash flow projections for affected NYC properties is our job; to underwrite 3.0 percent rent growth across the hold is ignoring the elephant in the room. Mamdani has been explicit about pursuing a rent freeze for stabilized units, fulfilling a major promise from his campaign. This topic is worthy of its own white paper. In the meantime, as an industry we should consider such possibilities critically, and not just in NYC.

In a similar vein, Massachusetts is now considering rent regulation across the Commonwealth. A recently introduced bill would cap annual rent increases at the Consumer Price Index for a 12-month period, or 5.0 percent, whichever is lower. The proposal includes several carveouts, excluding certain categories of housing from coverage which are detailed in the official petition. The rent in place for a unit as of January 31, 2026, would serve as the base rent for the annual rent increase limit. Lawmakers are sharply divided on this issue and it is highly likely that it will end up as a November ballot measure. We are watching this issue closely, especially since housing affordability challenges are clear and present across the U.S., as other states and municipalities are having hard conversations about how to spur new development while keeping housing costs in check. It presents a particularly difficult dilemma.

On a lighter note… Finally! More transactions! Like so many in the valuation space, we have been eagerly awaiting more transaction data, for office in particular. On April 14 Green Street announced that One Marina Park Drive in Boston’s Seaport had hit the market. Clarion Partners has listed the 494,000-square-foot, Class A office building, which is 99% leased. According to Green Street, bids are expected in the vicinity of $450 million, or $910 per square foot. If that is the strike price then it would be the largest involving a Boston or Cambridge office property without a life science component since 2021. Clarion originally acquired the property in December 2019 from The Fallon Company and Barings for $482 million or $980 per square foot. This suggests that current targeted pricing is roughly a 6.6 percent discount to pre-COVID pricing.

While we expect a busy 2Q across all property types, with this possible sale and others we’re tracking across the U.S., we are rooting for the comeback of office.

What other deals do you know of that are in the works? We welcome the opportunity to hear what you’re seeing. We welcome your thoughts and market observations!

What We’re Up To in 2Q

Callie Hanks Joins Breakpoint Advisors

Breakpoint is pleased to announce the addition of Callie Hanks, who oversees day-to-day business operations and supports key functions across finance and human resources. Callie brings over 15 years of experience in administration and project management across healthcare, marketing and professional services environments. She has a proven track record of managing complex workflows and supporting cross-functional teams to deliver consistent results. Welcome, Callie! We are lucky to have you.