| STILLINGER CAPITAL | Small-Bay Flex & Garage Condo October 5, 2026 |
| Durable goods spending hit $2,443.6B in August, up $48B or 2.0% in a single month, while consumer sentiment fell to 51.7 from 55.2. That gap is the whole story for garage condos. Sentiment measures how people feel. Durable goods measures what they actually bought, and boats, trailers, side-by-sides and collector cars sit inside that number. Those assets need 14x14 doors and 20 ft clear, not a 10x30 self-storage unit. The buyer is already committed. The housing stock and HOA rules did not change to accommodate them. |
10-Yr UST 5.24 ↓0.05 | SOFR 3.88 ↑0.01 | 30-Yr Mtg 7.28 ↑0.25 |
HY Spread 3.1 ↓0.14 | Durable Gds 2443.6 ↑48.00 | Sentiment 51.7 ↓3.50 |
| THE ASSET |
Building permits printed 1,403K in August, down 30K from 1,433K. Housing starts fell to 1,275K from 1,309K, a 2.6% drop. Less new residential means fewer new three-car garages coming online, and the existing stock of suburban homes with room for a 38 ft toy hauler is not expanding. Meanwhile total construction spending rose to $2.203T from $2.184T, up 0.85% month over month. Vertical costs are not falling. Replacement cost on a 490 to 1,080 sq ft insulated shell with 20 ft clear and a 14x14 overhead door is going up, not down.
The adjacent comps tell you where institutional attention sits. Provident closed a construction loan on an 891-unit self-storage project in Glen Rock, and a Miami-Dade self-storage ground-up drew a $20M construction loan. That is capital chasing climate-controlled lockers at 10x10. Nobody in those deals is underwriting 20 ft clear height. We do not have a published national garage condo supply count. Treat anyone who quotes one as guessing.
| BULLISH | Costs up 0.85%, permits down 2.1%, no national supply glut data to contradict |
| THE DEMAND |
Durable goods spending reached $2,443.6B in August, a $48B monthly gain. That is the single cleanest read on the garage condo tenant. Total vehicle sales slipped to 16.378M in September from 16.98M, down 3.55%, and consumer sentiment dropped to 51.7. Real disposable income was flat at $18,410.5B, down $4.9B. Unemployment ticked to 4.2% from 4.1%. So the picture is split: the aggregate durables number is strong, the marginal buyer is nervous.
The RV channel is consolidating rather than contracting. Winnebago promoted Adam Gudger to lead its towables division. DexKo named Lee Sneed president of Dexter effective October 1. General Coach Canada bought the Prolite ultralight travel trailer brand. National Powersport Auctions' October report shows wholesale pre-owned RV prices settling below seasonal average, which is a buying window for end users, not a demand collapse. Cheaper used units put more toys in driveways. HOAs still ban them. That is the referral pipeline.
| NEUTRAL | Durables up 2.0% but sentiment 51.7 and vehicle sales down 3.55% |
| THE CAPITAL |
The 10-year Treasury printed 5.24% on October 1, down from 5.29%. SOFR sits at 3.88%, up a basis point. That is an inverted funding picture for anyone floating: short money is cheaper than long money, and the 10Y-2Y spread is just 0.45, down from 0.46. High yield spreads tightened to 3.10% from 3.24%, a 4.3% compression. Credit is not panicking. CRE loan delinquency fell to 1.53% from 1.56%.
Thirty-year mortgage jumped to 7.28% from 7.03%, a 25bp move in a week. That matters here because a garage condo buyer paying cash or financing a $150K to $300K suite is comparing that payment to a home equity draw. The HELOC math just got worse. On the institutional side, Blackstone's industrial CMBS swelled to £1B on strong demand and BREIT is nearing a $1.7B CMBS loan for an industrial portfolio. Industrial outdoor storage is now finding its own home in CMBS as investor appetite grows. Small-bay flex sits adjacent to that bid.
| NEUTRAL | Spreads tightening and delinquency falling, but 10Y 5.24% and mortgage 7.28% bite |
| THE TAX ANGLE |
The Federal Register published a correction on September 28, 2026 to the rule covering Information Reporting Regarding Qualified Opportunity Zones and Updated Qualified Opportunity Fund Certification and Decertification Procedures. The headline mechanic for a garage condo developer: a QOF has to self certify, stay certified, and now faces tightened information reporting. Decertification procedures are the part people ignore until it costs them. If a fund trips up, investors can lose deferral treatment on gains they rolled in. Read the actual document before assuming your zone play still works the way it did in 2019.
Separately, the mechanic most garage condo owners underuse is cost segregation. A 20 ft clear shell is not one 39-year asset. Doors, specialty electrical, site lighting, paving and fencing often reclassify to 5, 7 and 15-year lives. On a $250K suite that can shift a meaningful share of basis into accelerated buckets. We do not have a current bonus depreciation percentage in today's signals, so confirm the applicable rate. This is general information, not tax advice. Talk to your CPA.
| NEUTRAL | OZ correction adds compliance friction; cost seg mechanics unchanged and still underused |
| Buford, GA | No new data today beyond the Gwinnett County Public Schools redistricting plan published September 23. Watch household growth implications. |
| Fort Mill, SC | Development moratorium expired October 1. Silfab Solar readying full operations. German manufacturer leased 201,000 sq ft near HQ campus. |
| Concord / Lake Norman, NC | Commissioners rejected a rezoning for a proposed home community near Lake Norman on September 22. Residential supply stays constrained. |
| Forney, TX | No Forney-specific signal in today's feed. National permits down to 1,403K is the only read. |
| Benton, KY | No new data today. Durable goods at $2,443.6B is the relevant national proxy for lake-market 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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