Real estate · Industry brief

USDA Rural Development announced a new 24-month pilot program to simplify rental preservation transactions, with details published in the Federal Register on September 25. The pilot expands flexibilities for Section 515 transfers, Section 515 transfers using Low Income Housing Tax Credits, and Section 538 loans or transfers, with changes to appraisals, paperwork acceptance, and construction requirements. For LIHTC transactions, higher developer fees and returns on investment may be permitted. Simultaneously, USDA increased the maximum loan-to-cost percentage for Section 538 continuous guarantee loans from 70% to 80%. Source: USDA Rural Development announcement. The Treasury Department and IRS are proposing new regulations to implement reporting requirements for Opportunity Zone investments, requiring more detailed information including data on affordable housing. Comments are due October 16, with requests to speak at a November 5 public hearing due by October 13. Source: Treasury Department and IRS regulatory notice. HUD reopened the FY26 Continuum of Care funding notice on September 18 following a federal appeals court ruling, maintaining significant programmatic changes including moving away from the Housing First model. The application deadline is September 30, with anticipated awards December 1. Source: HUD Notice of Funding Opportunity.

AI investment is concentrating commercial real estate demand in technology hubs, particularly Boston and San Francisco, where data center, multifamily, and office activity are accelerating. Texas markets, especially Dallas and Houston, remain highly active driven by population growth, corporate relocations, and strong data center development demand. Industrial fundamentals stay healthy across major markets including Atlanta, Chicago, Los Angeles, and New York, though power availability and infrastructure capacity are increasingly constraining new development. Office recovery is bifurcated by region—showing gradual improvement in tech-focused markets but remaining soft in New York and Chicago, while federal workforce reductions continue pressuring Washington, DC. Data centers and industrial properties are dominating transaction momentum, with investors emphasizing market-specific fundamentals and long-term demand drivers over broad market plays.