The all-cash acquisition of VERIS Residential by an Affinius-led consortium is one of the most consequential REIT take-privates in recent memory. The roughly $3.4 billion deal, which values VERIS at about $21.50 per share, came with a premium near 30 percent to its unaffected trading price—a rare outcome for a publicly traded real estate company whose liquidity and valuation had lagged broader markets. What makes the transaction notable is not just the price tag, but who is behind it and what it says about the evolving relationship between public real estate equity and deep private capital.

Affinius Capital is a New York-based alternative investment firm known for taking activist, operational and private ownership stakes in real estate and credit. The firm’s strategy emphasizes long-term operational value creation and flexibility outside the quarterly earnings cadence of public markets. Unlike traditional institutional investors that buy index-neutral positions, Affinius tends to work collaboratively with management and boards to unlock value through strategic repositioning, capital realignment or, as in VERIS’s case, a full privatization when public multiples fail to reflect intrinsic asset values.

VERIS itself is illustrative of why activist pressure can mount in sectors where pricing seems disconnected from fundamentals. The company’s portfolio, once a mix of conventional multifamily and suburban infill apartments, evolved in recent years toward mixed-use, lifestyle-oriented assets that blend residential, retail and experiential components. While those properties outperform in select markets, the company’s share price stubbornly traded at a discount to what private valuations suggested, creating fertile ground for outside voices to question strategy and push for alternatives.

Indeed, activist investors played a visible role in bringing this deal to fruition. Groups such as Land & Buildings have become well known in real estate circles for pressuring REIT boards and management teams to consider monetization or structural change when they believe a company’s stock undervalues its assets. Propmodo has documented how activists increasingly target REITs with wide valuation gaps and what they describe as underleveraged or underoptimally managed portfolios. Their campaigns often highlight share price discounts to net asset value, call for portfolio simplification, and urge management to evaluate strategic transactions. In VERIS’s case, those pressures helped crystallize shareholder support for a premium take-private bid rather than continued public trading at muted multiples.

This trend is not new, but it has gained momentum. In the past few years, several REITs once thought destined to remain public have found themselves folded into private hands after similar dynamics played out. CoreSite Realty, a data-center specialist, agreed to a take-private sale backed by Blackstone. Life Storage accepted a buyout that took it off public markets. Office-oriented names such as Douglas Emmett also saw acquisition interest in part because public valuations lagged perceived private market values. Each of these transactions underscored a growing reality: when a REIT’s share price trades persistently below private pricing, private capital can step in with certainty of execution.

Brookfield, Starwood, Blackstone, and other large alternative managers have also participated in this cycle, but Affinius distinguishes itself by anchoring these deals with operational intent rather than purely financial arbitrage. In markets where capital remains cautious and trading multiples are compressed, that combination of activism and operational focus can be potent. For shareholders, it can unlock value; for boards, it can create a strategic pathway that public markets alone sometimes cannot provide.

The VERIS sale reminds the industry that public markets are not always fair to real estate companies. When markets lose confidence in a sector’s liquidity or valuation mechanisms, private capital with patient time horizons and a willingness to pay control premiums will step in. What comes next for those REITs still trading at a discount will tell us whether this pattern remains a niche outcome or becomes the default strategy for undervalued public real estate.

California’s aggressive push to override local zoning barriers took another step toward permanence this week. The case centered on a state housing law that limits how and when cities can block residential development if they are not meeting state-mandated housing production targets. The statute is part of a broader suite of reforms designed to compel municipalities to plan for and approve more housing, particularly multifamily and affordable units, by streamlining approvals and restricting discretionary denials. Local opponents argued the law intruded on traditional municipal authority over land use and sought review from the Supreme Court of the United States. The justices declined to take up the appeal, leaving lower court rulings in place.

At its core, the law shifts leverage from city councils to Sacramento. If a jurisdiction falls out of compliance with its housing element obligations, developers can invoke streamlined approval pathways for qualifying projects, limiting local discretion. The framework is designed to prevent cities from approving housing targets on paper while quietly slowing or denying projects that would actually meet those goals. It is a direct response to years of underproduction that have fueled high prices and chronic affordability gaps.

The Supreme Court’s decision not to intervene effectively strengthens the state’s hand. For housing development, particularly in high-cost coastal metros and job-rich suburbs that have historically resisted density, the message is clear: state housing mandates carry real legal weight. Developers pursuing affordable or mixed-income projects in noncompliant cities now face fewer constitutional uncertainties, which can reduce litigation risk and improve financing prospects.

That doesn’t mean a wave of new construction is guaranteed. Neighborhood opposition often still shapes what gets built. But the legal framework increasingly favors projects aligned with state affordability goals over local hesitation. In regions where the state wants to see more affordable housing, especially near transit and employment centers, this decision reinforces a policy environment in which local governments have less room to say no and developers have a clearer path to yes.

Chicago, the Midwest's largest office market, finally registered positive net absorption in 2025, the first full year of demand since before the pandemic, driven by hiring in tech, financial services and healthcare. Tenants took space in core downtown CBDs and trophy suburban campuses, signaling that occupiers are selectively expanding where workplace experience, location and space quality align with hybrid work strategies. Vacancies remain elevated relative to historical norms, but the shift to positive absorption marks a noteworthy inflection point in a region long seen as a laggard in office recovery.

The region’s strength lies in its diversified economy and relatively affordable cost structure. Unlike spec-driven Sun Belt markets, Midwest demand is anchored in stable corporate sectors less prone to boom-and-bust swings. Cities like Chicago, Minneapolis and Indianapolis saw notable leases for newer or renovated product, often tied to density strategies that trade inefficient older square footage for modern space with amenities and transit access. Employers there are still embracing hybrid schedules but using office footprints to foster culture and collaboration rather than simply accommodate headcount.

Weaknesses remain stubbornly familiar. Vacancy rates, especially in secondary and tertiary assets, are still high, and a meaningful portion of the existing stock is functionally obsolete. Older buildings with low ceilings, narrow floor plates and minimal amenities continue to struggle to attract tenants, pushing landlords toward value-add strategies or conversions to alternative uses. Suburban office performance is uneven: some well-located campuses benefit from corporate relocations, while others languish without clear demand drivers.

The Midwest’s office rebound is cautious, rooted less in a broad return to pre-pandemic work patterns and more in tenants upgrading to space that better supports their hybrid models. Its relative affordability and economic diversity are strengths that differentiate it from coastal markets still mired in higher vacancy and slower leasing momentum. But until a larger share of older, lower-quality inventory is repositioned or removed, the recovery will likely remain concentrated in higher-end urban and well-amenitized suburban buildings rather than broad-based across all property types.

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

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