Affordable Housing Tax Credit Properties Show Resilience Despite Rising Operational Pressures

• Affordability resiliency: Affordable housing looks steady on the surface, but rising operational strain is starting to show beneath it.

• Gray Friday: Record $44.2B “Cyber Week” spending highlights growing divide between premium locations and struggling malls.

• Sand trap: Sinking luxury towers in Miami are forcing developers and coastal cities to rethink high-rise construction and monitoring.

• Join tomorrow’s webinar: Smart buildings are evolving as AI and connected systems redefine how properties think, adapt, and perform. Sign up

Presented by Tailorbird

One Home for Unit-Level, End-to-End Budgeting

Tailorbird consolidates all CapEx budgets, projects, and completed work in one place. It then provides real-time oversight by tracking actual spend versus projected costs, driving stronger budgeting and forecasting. 

If you are missing property data, our AI can generate complete records — including 98% accurate takeoffs and EUL/RUL dates for all major assets — in just 3 days, with only an address and a rent-roll. You gain a complete picture of what you own, what you need to do, and what it will cost, for every property in your portfolio.

Federal Policy

Affordable Housing Tax Credit Properties Show Resilience Despite Rising Operational Pressures

Affordable housing has been bracing for trouble for years, but the latest CohnReznick study shows a sector holding remarkably steady even as pressures mount. High occupancy and ultra-low foreclosure rates continue to set it apart from the rest of commercial real estate.

Beneath that stability, though, the watch-list is swelling. More properties are under added scrutiny, operators are facing rising costs they can’t pass through, and economic occupancy is slipping in markets where protections have shifted post-pandemic.

The picture that emerges is one of resilience under strain. LIHTC assets aren’t immune to today’s challenges, but they’re absorbing them in a way the broader CRE market can’t ignore—and shouldn’t.

Overheard

Premium Malls Hold Ground as E-Commerce Tops $44B

The record $44.2 billion in online spending during Cyber Week tells a split story for retail real estate. One where digital momentum threatens to hollow out weaker properties while premium landlords like Simon Property demonstrate that physical locations still command consumer attention when executed properly. Simon's 6.4% traffic increase during Black Friday weekend, with mall traffic up 7.1%, came as the company's stock has climbed over 16% in the past six months, significantly outperforming the broader retail REIT sector. This divergence matters because it signals that institutional capital is beginning to price in a bifurcated future where Class A malls with strong omnichannel integration hold their ground while secondary centers face mounting pressure from the relentless shift toward e-commerce.

The numbers from Cyber Week reveal why real estate investors are making these distinctions. Black Friday's 9.1% online growth outpaced Cyber Monday's 7.1% gain for the second straight year, suggesting that digital shopping is no longer confined to a single promotional spike but has become embedded across the entire holiday corridor. Simon's traffic gains and double digit sales growth from key tenants demonstrate that experiential retail destinations can still capture wallets, particularly when they've pivoted toward mixed use development and helping digital native brands establish physical presence. The challenge for retail landlords is that this consumer behavior requires constant capital investment in property transformation, something only the strongest balance sheets can sustain.

The market is already pricing this reality into retail REIT valuations, with better capitalized operators like Simon maintaining strong occupancy rates above 96% while commanding premium rents from tenants who view their locations as essential omnichannel touchpoints. Analysts have revised earnings estimates upward for select retail REITs like Regency Centers and Tanger, recognizing that well located open air and outlet properties are capturing different consumer segments than traditional enclosed malls. The $44.2 billion Cyber Week haul represents another incremental shift in the percentage of retail moving through logistics networks rather than storefronts, a trend that continues to reshape demand for last mile warehouse space. The divergence between winners and losers will likely only widen as each percentage point of e-commerce growth compounds into billions more in required fulfillment infrastructure and fewer reasons to maintain underperforming retail locations.

How Coastal High Rises Are Pushing Engineering Limits

Sunny Isles Beach spent two decades replacing its low-rise motels with some of the tallest towers on the Florida coast, only to learn that engineers had vastly underestimated how much these heavy buildings would sink. Built atop shifting layers of sand, silt, peat, and porous limestone, several towers settled two to three times more than predicted. Even as foundations grew deeper—now reaching 200 feet—recent geotechnical reports concede that accurately forecasting settlement on this barrier island remains “extremely difficult.”

Satellite data later confirmed that many buildings continue to sink years after construction. A University of Miami–led study found that roughly 70 percent of Sunny Isles’ oceanfront towers experienced additional settlement between 2016 and 2023. Experts say there’s no evidence of structural danger today, but they warn that unexpected or uneven settling can create long-term maintenance problems—cracked pipes, warped slabs, misaligned entrances—costs that ultimately fall on condo owners rather than developers due to Florida’s short statute of limitations for construction defects.

Despite the mounting evidence, no agency regularly monitors long-term settlement, leaving engineers without the data needed to understand why towers behave so differently even when built to similar specifications. Reports show wide disparities: comparable buildings over 600 feet tall have settled anywhere from 3 to 14 inches. As developers pursue even taller, heavier projects, foundation design has become a costly balancing act between engineering prudence and financial pressure, with some projects already reduced in height to mitigate risk.

For other coastal developers and cities, Sunny Isles is a warning: geology can outpace engineering assumptions. Taller towers on sandy barrier islands demand more rigorous, long-term monitoring; deeper, more resilient foundations; and clear disclosure standards for buyers. Without continuous data collection and updated design practices, communities risk repeating the same mistakes—pushing development higher before fully understanding how the ground beneath it moves.

Are You Enjoying This Newsletter?

Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

📧 Forward it to a friend and suggest they check it out.

🔗 Share a link to this post on social media.

🗣 Have ideas for future topics (or just want to say hello)? Share your feedback and tips at [email protected] or connect with us on X through @propmodo.

✅ Not subscribed yet? Sign up for this newsletter here.

📫️ Please add our newsletter email, [email protected], to your contacts to make sure you don’t miss any updates.

Enjoy reading about trends and innovation in commercial real estate? Subscribe to Propmodo.com for unrestricted access to reliable, data-driven journalism and exclusive insights available only to subscribers.