Alexandria Real Estate Equities just delivered what looks like a strong quarter on paper. Revenue surged past expectations, leasing hit its highest level in a year, and occupancy edged higher. From a distance, the numbers suggest stability returning to the life science sector.

Listen closer, though, and a very different story emerges. Beneath the headline growth, Alexandria booked massive impairments and openly acknowledged that the life science market remains deeply impaired, with recovery still years away. Executives framed 2026 not as a growth year, but as one defined by asset sales, balance sheet defense, and tough trade-offs.

The earnings call revealed a sector still waiting for venture capital, IPOs, and real tenant demand to come back online. Leasing is happening, but often only with heavy concessions, long delays before rent starts, and growing reliance on free rent to get deals done. If this is what survival looks like for the industry’s best-positioned landlord, the implications for the rest of the market are hard to ignore.

A coalition of large U.S. homebuilders is working on a proposal to create up to one million so-called “Trump Homes,” a massive housing initiative pitched as a way to help address the nation’s affordability crisis by blending private capital with builder scale. The program would involve selling entry-level homes into a pathway-to-ownership model funded by billions of dollars in private investment rather than direct government subsidies. In one version of the plan, investors would rent these homes to tenants whose monthly payments, if they remain in place for several years, would count toward a down payment should they choose to buy.

Lennar Corporation and Taylor Morrison Home Corporation are among the firms reported to be shaping the initiative, and early market reactions drove shares of several major builders higher on the news, underscoring how much the industry hungers for solutions to stagnating sales and widespread affordability challenges. Builders see the pitch as a way to both expand supply at scale and align with broader political attention on housing, particularly after the administration issued executive orders last year aimed at curbing institutional competition with individual homebuyers.

Despite the headline number, up to one million homes representing more than $250 billion in potential development, the proposal’s complexity is a major barrier. A White House official has said the administration is not actively considering the plan, and industry observers note that details such as the role of federally backed mortgages, investor risk allocation, and local zoning barriers remain unresolved. Private capital would bear initial losses in the structure, but aligning incentives and long-term ownership pathways at this scale would require regulatory clarity and buy-in from a wide range of stakeholders.

The idea illustrates how homebuilders and private investors are trying to think creatively about affordability beyond traditional subsidies or tax incentives. By tying rent payments to eventual ownership credits, the model aims to lower the upfront barriers to buying, but its fate will depend on political and capital market support. Implementation challenges and political skepticism suggest it may remain largely aspirational unless those hurdles are addressed.

Moody’s latest monthly data shows commercial real estate transaction volume slid further in December, extending a pattern of subdued deal activity that has characterized much of the past year. Deal counts and dollar volumes were down on both a monthly and annual basis, particularly in office and retail assets, as buyers and sellers struggle to find common ground on pricing and as financing remains less accessible than in previous cycles. Lower liquidity in the market has left many properties on the sidelines rather than in play, even as some sectors like industrial and multifamily continue to attract more relative interest.

Office properties, in particular, have seen sharp reductions in deal flow as vacancy rates stay elevated and lenders remain cautious, pricing risk more conservatively or declining to provide leverage at traditional terms. Retail deals have also lagged because of ongoing structural questions about consumer behavior and large format reuse. Industrial and multifamily assets have fared comparatively better but have not entirely offset the broader decline in total commercial transaction activity. With overall volumes still well below pre-pandemic levels, investors are clearly calibrating exposure to risk in an environment where financing costs, asset specific concerns, and wide bid-ask spreads make many deals difficult to execute.

The continued slowdown in deal volume underscores persistent market anxieties about valuations and financing conditions. Buyers are demanding deeper discounts or higher required yields to compensate for perceived risk, while sellers are often unwilling to budge far from prior book values, creating a standstill between the two. Lenders, meanwhile, have tightened underwriting, which limits credit availability and complicates execution for leveraged buyers. Cash buyers have stepped into some deals where pricing is clear and fundamentals are strong, but sheer volume remains soft.

This trend highlights an important phase in commercial real estate’s post-rate-hike adjustment. Deal volume has retreated not just because financing is more expensive today than it was in the early 2020s, but because buyers and sellers are recalibrating expectations about occupancy rates across property types. Until pricing and financing align more closely, and until cyclical headwinds ease, transaction markets are likely to remain muted and weighed down by caution.

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

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