The Next Phase of Real Estate Might Be About Financing, Not Owning

• Picks and shovels: Artis REIT is merging with RFA Capital, moving away from traditional ownership toward real estate financing and secondary markets.

• Electric choice: New York delayed its all-electric building mandate amid tensions over climate goals, construction costs, and grid readiness.

• Mallfunction: San Francisco’s biggest mall has fallen to foreclosure, offering a glimpse into retail’s uncertain urban future.

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The Next Phase of Real Estate Might Be About Financing, Not Owning

Traditional models shifting toward platform-based strategies

Artis Real Estate Investment Trust was once the kind of diversified property owner that embodied the Canadian REIT model. Its portfolio spans more than nine million square feet across industrial, retail, and office assets, split between Canada and the United States. With a market capitalization of around $650 million, Artis isn’t one of the giants, but it has long been seen as a steady, asset-heavy operation focused on rent collection and incremental growth. That makes its decision to merge with RFA Capital Holdings all the more notable.

The merger will see Artis absorbed into RFA’s banking and mortgage business, effectively transforming a traditional property owner into part of a financial platform. This is more than a structural reshuffling, it’s a signal that the future of real estate might be found on the balance sheet rather than in the skyline. By swapping physical assets for a share of a mortgage origination platform, Artis is betting that returns will come faster and more predictably from financing deals than from collecting rent on office or retail space in a slow-growth environment.

The timing of this move says as much as the deal itself. Commercial property values have been under pressure for years, especially in the office sector, and refinancing risk continues to rise as debt comes due in a higher-rate market. Many owners that spent years building portfolios are realizing that liquidity now comes from lending, not leasing. Mortgage and debt platforms, once seen as dull complements to ownership, are increasingly where the action is. They allow firms to participate in the real estate economy without taking on the risks of occupancy or depreciation.

This trend isn’t unique to Artis. DigitalBridge, formerly Colony Capital, made a similar transition from property ownership to infrastructure and investment management. Brookfield and Blackstone have leaned heavily into private credit and real estate debt funds, using their balance sheets to finance the kinds of deals they used to buy outright. These shifts show how institutional real estate players are rethinking what it means to be in the business. Controlling capital flows, rather than controlling buildings, has become the more scalable and defensible model.

Artis’s merger could prove to be a bellwether. If the combined company performs well, others might follow its lead, folding their property holdings into lending platforms or spinning off ownership arms altogether. The boundary between landlord and lender has always been porous, but in today’s market, that line is starting to disappear.

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The Pause on New York’s Gas Ban Could Reshape How Cities Go Electric

New York’s plan to require all-electric new construction has hit a pause button. The state agreed to delay enforcement of its All-Electric Buildings Act, a landmark policy that would have banned natural gas and heating oil systems in many new buildings starting next year. The law, the first of its kind passed by a state legislature, was challenged in federal court by a coalition of gas companies and building groups who argue that it’s preempted by federal energy regulations. Until the appeals process is finished, the rule is on hold.

The delay highlights the growing tension between climate ambition and the practical limits of the built environment. Electrifying new buildings makes sense on paper—new heat pump technology and cleaner grids promise lower emissions over time—but the economics still make developers wary. Many projects in colder parts of the state depend on gas for affordable heating, and the electric grid, already strained during peak demand, isn’t yet ready to carry the additional load of full-scale building electrification. The cost of compliance could ripple through housing prices and construction timelines, something local officials are reluctant to risk amid a housing shortage.

This legal timeout might end up shaping national policy as well. Other states and cities, including California and Washington, have been testing the same approach, only to face similar legal challenges and political blowback. The idea of decarbonizing buildings through bans alone is giving way to a more incremental strategy—one that includes incentives, grid modernization, and transitional fuels. If New York’s experience shows anything, it’s that the road to all-electric buildings will take more than legislation. It will take time, technology, and a grid that can keep up.

San Francisco’s Largest Mall Falls to Foreclosure as Urban Retail Faces a National Reckoning

After sitting vacant and without an owner for more than two years, San Francisco’s largest mall has officially been foreclosed upon. The 1.2 million-square-foot San Francisco Centre, once a retail anchor of Market Street, is now controlled by its lenders—Deutsche Bank and JPMorgan Chase—who took ownership through a $133 million credit bid, a fraction of the mall’s $1.2 billion valuation less than a decade ago. The move follows a 2023 default by Unibail-Rodamco-Westfield and Brookfield Properties, which walked away as the city’s retail market continued to deteriorate.

The banks have hired CBRE to manage and market the property for sale by next year, setting the stage for a potential redevelopment or repositioning. The mall, which has lost more than 95 percent of its tenants, sits partly on land owned by the San Francisco Unified School District, whose lease runs through 2043. With Nordstrom, Bloomingdale’s, and other anchors long gone, the structure has been sustained only by a court-appointed receiver tasked with maintaining the building and preserving its dwindling cash flow.

The foreclosure marks a turning point for San Francisco’s troubled downtown and signals a broader reckoning for American commercial real estate. Once seen as trophy assets, urban retail centers are being repriced for a new era of diminished foot traffic, hybrid work, and shifting consumer behavior. What happens next at the San Francisco Centre—whether a sale, a conversion, or another drawn-out vacancy—will offer a preview of how lenders, developers, and cities across the U.S. navigate the painful but necessary reset of urban retail real estate.

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