| STILLINGER CAPITAL | Small-Bay Flex & Garage Condo September 25, 2026 |
| RV shipments fell 16.4% in August to 23,599 units, with year-to-date volume down 14.2% at 207,191. That is the second straight year of contraction in new RV supply. It does not kill garage condo demand. The installed base of 11M-plus RVs already on the road still needs covered height, and HOA enforcement does not pause for a soft shipment year. What it does change is velocity. Fewer new rigs means fewer new buyers walking in cold. Underwrite lease-up to the existing fleet and small business tenant, not the showroom. |
10-Yr UST 5.11 ↑0.15 | SOFR 3.88 ↑0.01 | 30-Yr Mtg 7.03 ↑0.08 |
HY Spread 2.8 ↑0.07 | Durable Gds 2380.1 ↓24.60 | Sentiment 51.7 ↓3.50 |
| THE ASSET |
Total construction spending printed $2.158T in July, down $10.1B from $2.168T. Building permits fell to 1,403K in August from 1,433K, and housing starts dropped to 1,275K from 1,309K. Less vertical construction across the board means less new small-bay product hitting the ground in 2027. For an existing garage condo owner that is the whole argument: supply of 490 to 1,080 sq ft suites with 20 ft clear and 14x14 doors is not replenishing quickly, because the cost basis to build it today is set by the same steel and concrete inputs squeezing every other asset class.
The adjacent comp cuts the other way on capital intensity. Manhattan Mini Storage closed $2B in financing and BREIT lined up a $1.7B CMBS loan on a 19M SF industrial portfolio. Institutional money is chasing scale. Small-bay flex sits below that screen. Blackstone's UK industrial CMBS upsized from £617M to £1B on demand, which tells you industrial credit is open, but for portfolios, not for 40-unit garage condo projects.
| NEUTRAL | Supply pipeline thinning, but no direct pricing prints for garage condo comps today. |
| THE DEMAND |
The demand picture split three ways today. RVIA reported August shipments at 23,599 units, down 16.4% against 28,212 a year prior, with YTD down 14.2%. Consumer sentiment collapsed to 51.7 from 55.2, a 6.34% drop. Durable goods spending fell to $2,380.1B from $2,404.7B, off 1.02%. That is a consumer pulling back on big discretionary purchases.
Counterpoint: total vehicle sales rose to 17.19M SAAR from 16.757M, up 2.58%, and real disposable income climbed to $18,122.5B. Unemployment held flat at 4.1%. People are still buying trucks and toys, just not new motorhomes. Manufacturers are building anyway, Kropf Industries breaks ground on a 61,000 sq ft park model expansion September 28, and Thor shows 2027 Class B models the same week. Class B and van conversions are the growth category and they fit a 490 sq ft bay. The unknown we cannot answer from these signals: collector car auction values and powersports registrations. No data in today's feed.
| NEUTRAL | RV shipments and sentiment down, vehicle sales and disposable income up. Mixed. |
| THE CAPITAL |
The 10-Year Treasury printed 5.11% on September 23, up 15bps from 4.96%. That is a 3.02% move in a session and it is the number that matters most today. SOFR sits at 3.88%, barely moved. The 10Y-2Y spread widened to 0.31 from 0.26. The 30-year mortgage hit 7.03%, up from 6.95%. Long money got more expensive while short money stayed flat, which is a steepening curve and a message that the bond market is pricing duration risk, not recession.
Credit is still functional. High yield spreads at 2.80% are historically tight even after widening 7bps. CRE loan delinquency actually improved to 1.53% from 1.56%. And deals are clearing at size: BREIT's $1.7B industrial CMBS, Blackstone's £1B upsized UK industrial book, JLL launching a nontraded debt REIT. Industrial credit is open. For garage condo sponsors the practical read is that a 10Y at 5.11% means your exit cap assumption from 2024 is stale.
| BEARISH | 10Y up 15bps to 5.11%, mortgage at 7.03%. Debt cost is rising. |
| THE TAX ANGLE |
The IRS published proposed regulations on September 11 covering information reporting for qualified opportunity funds. The mechanic: QOFs would be required to file information returns with the IRS and furnish statements to investors who dispose of their interests, and qualified opportunity zone businesses would furnish statements to the funds that hold them. The regs also update QOF certification and decertification procedures. If you hold a garage condo project inside a QOF structure, this adds a compliance layer and a paper trail on disposition. Read the actual text at federalregister.gov, document 2026-18574.
Separately, the practical everyday mechanic for a garage condo owner is cost segregation. A 490 to 1,080 sq ft suite is not one undifferentiated 39-year asset. The 14x14 door, the door operator, specialty electrical, site paving and landscaping can often be reclassified to 5, 7 or 15-year lives, accelerating depreciation into the early hold. A study costs real money and only pencils above a certain basis. This is general information, not tax advice. Run it with your CPA.
| NEUTRAL | New QOZ reporting adds compliance burden; cost seg mechanics unchanged and still available. |
| Buford, GA | Gwinnett County industrial safety incidents dominated local coverage this month. No garage condo or flex zoning signal in the feed. |
| Fort Mill, SC | WSOC reports neighbors pushing back on a proposed warehouse project. Entitlement friction on big-box favors small-bay incumbents. |
| Concord / Lake Norman, NC | Board rejected a Lake Norman mega community, backed townhomes near a future CATS rail stop, and 163 homes advance nearby. |
| Forney, TX | No Forney-specific data today. Nearest signal is a Garland NAACP community event, which carries no real estate read. |
| Benton, KY | Only Evansville and Tri-State yard sale listings in the feed. No Marshall County development or permitting data. |
We map capital sources across private lenders, family offices and funds, and run cost segregation studies for owners of qualifying commercial property.
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