| STILLINGER CAPITAL | Small-Bay Flex & Garage Condo September 26, 2026 |
| 23,599 RV units shipped in August 2026, down 16.4% year over year, with YTD volume off 14.2% at 207,191 units. That is the demand input most people get wrong on garage condos. New unit sales fund the marginal buyer, but the installed base of 11M-plus rigs already parked in driveways is what fills 14x14 doors. Slower shipments mean fewer new toys, not fewer stored toys. Meanwhile the 10Y printed 5.18% and 30-year mortgage hit 7.03%. Units get harder to finance before they get harder to fill. |
10-Yr UST 5.18 ↑0.07 | 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 the prior month. Building permits fell to 1,403K in August from 1,433K, housing starts to 1,275K from 1,309K. Read that as a supply signal, not a demand signal. Fewer ground-ups means the 490 to 1,080 sq ft garage suite with 20 ft clear and a 14x14 door stays a scarce product type. Nobody is accidentally overbuilding this.
The adjacent comps are telling you where institutional money thinks square footage is worth owning. BREIT lined up a $1.7B CMBS loan against a 19M SF industrial portfolio. Blackstone's European industrial CMBS swelled from £617M to £1B on demand. Industrial CMBS is taking a bigger share of 2026 issuance with SASB deals leading. Big industrial gets the debt. Small-bay flex does not have a securitization market of its own, which is exactly why pricing here is set locally rather than by a spread desk in New York.
| BULLISH | Supply pipeline contracting; institutional capital validating industrial square footage without competing for small bays. |
| THE DEMAND |
RVIA reported 23,599 August shipments, down 16.4% from 28,212 a year prior, with YTD at 207,191 units and down 14.2%. Consumer sentiment dropped to 51.7 from 55.2, a 6.3% fall. Durable goods spending slipped to $2,380.1B from $2,404.7B. Those three prints say the same thing: the discretionary buyer paused.
The counterweight is real. Total vehicle sales rose to 17.19M in August from 16.757M, up 2.6%. Real disposable income climbed to $18,122.5B. Unemployment held flat at 4.1%. And the manufacturers are not acting scared. Kropf Industries breaks ground on a 61,000 SF park model expansion September 28. Thor shows 2027 Class B models at Open House the same week. Midwest Automotive Designs rolled 2027 Patriot updates. Garage condo demand is a function of what is already owned, not what ships next quarter. We do not have submarket level RV registration or collector car auction data in today's signals, so treat local absorption as the number to verify, not the national shipment line.
| NEUTRAL | Shipments and sentiment down hard; income, employment and vehicle sales offsetting. Mixed, not broken. |
| THE CAPITAL |
The 10Y hit 5.18% versus 5.11% prior. SOFR sits at 3.88%. Thirty-year mortgage reached 7.03%, up from 6.95%. The 10Y-2Y spread widened to 0.36 from 0.31, a 16% move, so the curve is steepening from the long end. That is a cost of capital problem for anyone selling garage condo units to individual buyers on amortizing paper.
Credit conditions are otherwise calm. High yield spreads at 2.80% are tight by any historical standard. CRE loan delinquency fell to 1.53% from 1.56%. Capital is clearing where the asset is institutional: BREIT's $1.71B industrial refi, Manhattan Mini Storage's $2B financing, a Stepstone venture tapping CMBS for a self-storage acquisition, JLL launching a nontraded debt REIT. Bisnow also flagged M&A lifting August volume while single-asset sales slumped. Translation for small-bay: portfolio buyers are transacting, one-off assets are not. Price accordingly and expect the local bank to be your construction lender, not a conduit.
| BEARISH | Long rates rising, mortgage above seven, single-asset sales slumping. Buyer financing is the constraint. |
| THE TAX ANGLE |
When you buy a garage condominium, the IRS does not see one asset. It sees land, building shell, and a pile of shorter-lived components. A cost segregation study splits them. The 14x14 door operator, the interior electrical serving your equipment, site paving, exterior lighting and drainage often land in 5, 7 or 15 year buckets rather than the 39 year nonresidential line. Shorter recovery periods pull depreciation forward. If you use the unit in a trade or business, Section 179 may also apply to qualifying personal property, subject to income limits and the investment phase-out.
On the Opportunity Zone side, the Federal Register published a correction on September 28 covering information reporting for QOZs and updated QOF certification and decertification procedures. If your garage condo project sits in a zone, the compliance and reporting mechanics just got refreshed and your fund administrator should be reading the actual document, not a summary. This is general information, not tax advice. Talk to your own CPA before you rely on any of it.
| BULLISH | Component depreciation and refreshed QOZ reporting both favor owners who plan the structure early. |
| Buford, GA | Gwinnett County broke ground on a new pantry warehouse. Industrial activity continues; no garage condo specific prints today. |
| Fort Mill, SC | Neighbors pushing back on a proposed warehouse project. Entitlement friction rising for big-box; small-bay reads differently to boards. |
| Concord / Lake Norman, NC | Board rejected a Lake Norman mega community and a rezoning near the lake. Townhomes near future CATS rail advanced. |
| Forney, TX | No Forney-specific signal today. Watch Kaufman County permit flow and Dallas-side RV dealer inventory for the local read. |
| Benton, KY | No new data today. Kentucky Lake boat storage demand is seasonal and unmeasured in this signal set. |
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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