From Office Campuses to Affordable Housing, Mass Timber Finds a Market

• Hard proof: Mass timber has crossed the line from concept to demonstrated performance in real commercial projects.

• City of accountability: New York City’s intervention in a landlord bankruptcy signals a tougher stance on distressed multifamily assets.

• Cost contamination: Condo prices and sales are at their weakest point in over ten years as insurance and association costs rise.

• Multifamily outlook webinar: Demand will be steady in 2026, but margins are thinner and execution matters more than ever. Sign up

Flash Poll

Presented by Wall Street Prep

A Great Property Doesn’t Always Make a Great Deal

Wharton Online’s Real Estate Investing Certificate Program teaches the same analytical framework used by institutional real estate investors and experienced operators alike.

You’ll get:

• The same training used at BlackRock, KKR, and other top firms

• A globally recognized certificate from a top business school

• 1-on-1 coaching with Wharton faculty and investing practitioners from Wall Street Prep

Save $200 with early enrollment by Jan. 12 + $300 off with code PROPMODO.

Development

From Office Campuses to Affordable Housing, Mass Timber Finds a Market

Mass timber is no longer hovering on the fringe of commercial real estate. After years of being treated as a sustainability experiment or architectural statement, engineered wood is showing up in serious projects across the country, backed by real capital and real risk. What’s changing isn’t just volume, but confidence: developers are no longer asking whether mass timber works, but where it works best.

At the high end, projects like Walmart’s massive headquarters campus prove timber can support the demands of global corporations at scale. At the same time, ambitious towers like Milwaukee’s Edison reveal the growing pains that come with pushing timber into true high-rise territory, where financing, supply chains, and execution risk tighten quickly. Together, these projects frame the opportunity and the friction shaping mass timber’s next chapter.

The real momentum, though, is building in the middle. Offices, mixed-use districts, affordable housing, and even industrial projects are quietly adopting mass timber as a practical tool to cut schedules, differentiate assets, and manage carbon without blowing up budgets. The result is a material that has moved beyond novelty, but not yet into inevitability—and a market that is learning, project by project, how to build differently at scale.

Overheard

City Intervention in Landlord Bankruptcies Raises the Bar for New York Real Estate

New York City’s decision to step directly into a private landlord bankruptcy marks a clear shift in how distressed multifamily real estate will be handled in the city. By intervening early, the mayor signaled that bankruptcy will no longer serve as a clean exit from chronic housing violations or deferred maintenance. In a market where more than 60 percent of households rent and thousands of buildings carry open violations, this move reframes restructurings as public interest events rather than purely financial proceedings.

The immediate implication for New York real estate is tighter underwriting around compliance risk. Portfolios with elevated violation counts, aging building systems, or histories of tenant complaints now face a higher likelihood of city involvement during distress. That pressure is likely to extend timelines, raise capital expenditure requirements, and reduce the upside traditionally associated with buying troubled assets at a discount. As borrowing costs remain elevated and operating expenses continue to rise, bankruptcy may become less attractive as a reset mechanism and more expensive as a path to resolution.

This approach is unlikely to stay contained to New York. Cities with similar rent burdens and political dynamics are positioned to follow. Los Angeles and San Francisco both have renter shares above 55 percent and persistent backlogs of code violations. Chicago and Boston have seen steady increases in housing court filings and tenant protection measures since 2020. At the state level, New Jersey, California, and Oregon have expanded enforcement authority and tenant rights alongside rising multifamily distress. As more large landlords face refinancing gaps over the next two years, municipal governments in these markets may view intervention as a tool to influence outcomes without direct ownership.

If this trend continues, distressed multifamily real estate might start moving closer to a regulated utility than a private asset. Owners in New York and similar markets will have to be more proactive when it comes to upkeep and maintenance or face dire consequences. The cost of ignoring building conditions is no longer limited to fines or reputational damage. Now properties will have to be accountable to public oversight at the most sensitive point in its financial life cycle.

Condo Prices Fall as Fees and Insurance Costs Bite Both Buyers and Sellers

The U.S. condo market is confronting its most pronounced downturn in over a decade, with prices slipping and sales cooling sharply in many metropolitan areas. In late 2025, condo resale prices fell noticeably year-over-year even as single-family home values showed more stability. That divergence reflects a mix of rising ownership costs, aging inventories and uneven buyer demand. Condos that once sold briskly are now sitting longer on the market and frequently trading below their prior sale price, a sign that both end users and investors are rethinking the calculus of urban multifamily living.

A central factor dragging on condos is the ballooning cost of ownership. Many association fees have surged as condo boards grapple with higher insurance premiums, especially in regions prone to natural disasters, and escalating maintenance and capital repair obligations. In some buildings the cost of association assessments plus insurance now adds thousands of dollars per year to the cost of owning a unit, trimming the affordability cushion that once made condos attractive to first-time buyers and young professionals. That cost pressure has been especially acute in older or coastal buildings where structural repairs and higher risk profiles drive fees upward, leaving buyers wary and sellers forced to adjust price expectations downward to compensate.

Looking ahead, the question for investors is whether these costs stabilize or continue climbing. Insurance premiums for multifamily and condo buildings have already risen at double-digit annual rates in several coastal and Sun Belt markets, and industry forecasts suggest elevated catastrophe risk could keep pressure on pricing through the next few policy cycles. At the same time, deferred maintenance from the last decade is colliding with stricter safety standards, meaning capital calls and special assessments are likely to become more common. If HOA fees and insurance continue to outpace wage and rent growth, condos may struggle to regain pricing power, particularly in older urban buildings. That dynamic could suppress values longer than past downturns and push buyers and capital toward newer assets, rental housing, or markets where operating costs are easier to predict.

Live Webinar

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.