| STILLINGER CAPITAL | Small-Bay Flex & Garage Condo September 29, 2026 |
| August RV shipments fell 16.4% to 23,599 units, and dealers are openly shifting to smaller, lower-priced models. That is the headline risk to garage condo demand, but read it correctly. Shipments measure new factory output, not the installed base of roughly two decades of rigs already owned, financed and parked. Storage demand tracks the fleet, not the build rate. Total vehicle sales actually rose 2.58% to 17.19M in August. The softness is in new big-ticket units. The parking problem is unchanged. |
10-Yr UST 5.17 ↓0.01 | SOFR 3.9 | 30-Yr Mtg 7.03 ↑0.08 |
HY Spread 3.02 ↑0.09 | 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. Housing starts fell 2.6% to 1.275M and permits dropped 2.09% to 1.403M. Bisnow reports rising costs are stifling U.S. construction projects outright. For a 490 to 1,080 sq ft garage suite with 20 ft clear and a 14x14 door, that cuts both ways. Vertical cost per foot on a 20 ft clear shell is not falling. But neither is competing supply.
The supply story is mostly political, not economic. Fort Mill residents pushed back hard on a proposed warehouse distribution center across three separate outlets this month. That is the same entitlement environment that makes a 30-unit small-bay condo project easier to land than a 400,000 sq ft box, and it is why owner-occupied flex keeps clearing where big industrial stalls. Industrial production ticked up marginally to 103.07. No new garage condo pricing or absorption prints in today's signals. Underwrite off your own comps, not a national index.
| NEUTRAL | Costs stifling new supply supports existing pricing, but no fresh absorption data today. |
| THE DEMAND |
RVIA put August shipments at 23,599 units, down 16.4% year over year. WNDU reports dealers weighing smaller, lower-priced models as the market softens. Consumer sentiment collapsed to 51.7 from 55.2, a 6.34% drop. Durable goods spending fell 1.02% to $2.3801T. That is four demand indicators pointing the same direction, and pretending otherwise would be dishonest.
Now the other side. Total vehicle sales rose 2.58% to 17.19M annualized. Real disposable income rose to $18.1225T. Unemployment held flat at 4.1%. Every unit shipped in the 2020-2024 boom still exists and still needs somewhere to sit that is not an HOA-restricted driveway. Luxury Travel Magazine is running winter RV storage prep content. Elkhart Open House drew full attendance and Kropf broke ground on a 61,000 sq ft expansion, so the manufacturing base is not capitulating. Collector car auction values and powersports registration data are absent from today's signals. Unknown, not assumed.
| NEUTRAL | Shipments and sentiment weak; installed fleet, income and vehicle sales offset the drag. |
| THE CAPITAL |
The 10-year sits at 5.17%, down a single basis point. The 10Y-2Y spread compressed 11.11% to 0.32. SOFR held flat at 3.90%. The 30-year mortgage pushed up to 7.03% from 6.95%, which matters because the retail garage condo buyer often prices the purchase against his home equity line. High yield spreads widened to 3.02% from 2.93%. That is a mild risk-off tick, not a dislocation.
Industrial credit is genuinely open. Blackstone is landing a $1.71B CMBS refi on a U.S. industrial portfolio, and its UK industrial CMBS swelled from £617M to £1B on demand. Yahoo Finance reports industrial CMBS gaining issuance share with SASB deals leading. PCCP closed debt and equity funds at a combined $5B. CRE loan delinquency improved to 1.53% from 1.56%. Bisnow notes M&A lifted August volume while single-asset sales slumped. Large industrial paper prints. Small-bay construction debt still gets underwritten deal by deal on sponsor strength.
| NEUTRAL | Industrial CMBS wide open, delinquency improving, but five-handle base rate caps valuations. |
| THE TAX ANGLE |
The Federal Register published a correction on September 28 covering information reporting for Qualified Opportunity Zones plus updated QOF certification and decertification procedures. If you hold a garage condo project inside a QOF, this is administrative plumbing with real teeth. Decertification procedures determine how a fund loses its status, and losing status mid-hold unwinds the deferral and the ten-year basis step-up you bought the structure for. Read the actual document before your next 8996 filing.
Separately, the mechanic most garage condo buyers underuse is cost segregation. A 490 to 1,080 sq ft suite is not one 39-year asset. Site work, paving, exterior lighting, fencing and landscaping typically fall into 15-year land improvements. The 14x14 door operator, specialty electrical serving a lift, and dedicated HVAC can often be reclassified to 5 or 7-year personal property. That reclassification is what makes bonus depreciation useful. A study costs real money and needs an engineer, not a spreadsheet. This is general information, not tax advice. Confirm every position with your CPA.
| NEUTRAL | New QOZ procedures add compliance burden; cost seg mechanics unchanged and still available. |
| Buford, GA | Gwinnett broke ground on a new pantry warehouse. Two separate fatal industrial incidents reported in the county Sept 10. |
| Fort Mill, SC | Three outlets covered resident pushback on a proposed warehouse rezoning. Big-box entitlement resistance favors small-bay formats. |
| Concord / Lake Norman, NC | Divided board backed Lake Norman townhomes near a future CATS commuter rail station. Denser housing means fewer private garages. |
| Forney, TX | Kaufman County hosting a reentry and workforce development job fair. No new flex or industrial supply data today. |
| Benton, KY | No Benton or Marshall County signals in today's feed. Watch Kentucky Lake marine slip and winter haul-out demand. |
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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