| STILLINGER CAPITAL | Small-Bay Flex & Garage Condo October 17, 2026 |
| 290,000. That is where RVIA and ITR Economics now peg 2026 wholesale RV shipments, flattening to 285,000 in 2027. Two years of soft wholesale does not shrink the parked fleet. It reprices it. Roughly 11 million households already own the units that need 14x14 doors and 20 ft clear, and HOA covenants do not care what Elkhart ships next spring. With the 10Y at 5.10% and sentiment at 51.7, the buyer pool thins and the end-user who actually needs the box gets a better basis. |
10-Yr UST 5.1 ↓0.09 | SOFR 3.89 ↑0.01 | 30-Yr Mtg 7.4 |
HY Spread 3.23 ↓0.02 | Durable Gds 2443.6 ↑48.00 | Sentiment 51.7 ↓3.50 |
| THE ASSET |
Total construction spending printed $2.203T in August, up $18.7B from $2.184B prior, a 0.85% gain. That is the cost side of your pro forma refusing to cooperate. Meanwhile building permits fell to 1,403K from 1,433K and housing starts dropped to 1,275K from 1,309K. Residential pulls back, vertical cost does not. For a 490 to 1,080 sq ft garage condo with 20 ft clear and a 14x14 door, the shell is the whole asset. There is no tenant improvement allowance to hide behind.
The adjacent comp is instructive. JLL closed a $20M construction loan on a Fort Lauderdale self-storage development and Provident financed an 891-unit project in Glen Rock. Capital is still funding climate-controlled boxes for strangers' cardboard. Small-bay flex sells the box outright to an owner who paints the floor and installs a lift. Different buyer, different exit, different default risk. Industrial production at 103.95, up 0.66%, says the small business inventory user is still working.
| NEUTRAL | Costs up 0.85%, housing supply down 2.6%, no direct garage condo pricing print today. |
| THE DEMAND |
RVIA's Fall 2026 RoadSigns projects 290,000 wholesale shipments for 2026 (range 284,600 to 295,400) and 285,000 for 2027 (range 274,700 to 295,300). Lightspeed's September dealer report said sales off, parts up, service flat. Read that carefully. Parts up and service flat is the signature of an installed base getting maintained rather than replaced. That installed base is exactly who rents and buys a 1,080 sq ft bay. New unit sales drive the marginal customer. The existing fleet drives occupancy.
The consumer backdrop is genuinely soft. Consumer sentiment at 51.7, down 6.34% from 55.2. Total vehicle sales 16.378M, down 3.55%. Real disposable income 18,410.5B, essentially flat and slightly negative. Unemployment ticked to 4.2%. The offset is durable goods spending at $2,443.6B, up 2.0% or $48B. People are still buying things that need storing. We do not have current collector car index values or state-level RV registration data in today's signals, so treat those channels as unmeasured rather than strong.
| NEUTRAL | Durable goods +2.0% offsets sentiment 51.7 and flat 285K shipment outlook for 2027. |
| THE CAPITAL |
The 10Y printed 5.10 on October 15, down from 5.19. The 10Y-2Y spread widened to 0.35 from 0.33. SOFR edged to 3.89. The 30-year mortgage held flat at 7.40. A five handle on the long bond is the number that matters for an end-user writing a check on a garage suite, because the competing use of that capital just got more expensive and the buyer's own home financing did not improve.
Credit itself is not broken. High yield spreads tightened to 3.23 from 3.25. CRE loan delinquency fell to 1.53% from 1.56%. Castlelake priced a $1.1B CRE CLO, Blackstone is landing a $1.71B CMBS refi on industrial, and Investcorp bought a Massachusetts industrial portfolio for $76.5M. Prologis flagged a development and sales slowdown amid volatility, which is the honest read: institutional industrial is pausing new starts while the credit window stays open for stabilized paper. Small-bay sponsors with presales get financed. Speculative pads wait.
| NEUTRAL | HY 3.23 and delinquency 1.53% are benign, but 10Y at 5.10 caps pricing. |
| THE TAX ANGLE |
On September 28, 2026 the Federal Register published a correction to the rule on Information Reporting Regarding Qualified Opportunity Zones and Updated Qualified Opportunity Fund Certification and Decertification Procedures. The practical content is administrative: how QOFs certify, how they get decertified, and what gets reported. If you hold a garage condo inside a QOF structure, decertification is the tail risk. Lose QOF status and the deferral and the ten-year basis step-up go with it. Read the certification mechanics before the compliance calendar, not after.
Separately, the mechanic most garage condo owners underuse is cost segregation. A purchased suite is not one 39-year asset. Site work, paving, fencing, exterior lighting and landscaping are typically 15-year land improvements. Specialty electrical for a lift, compressed air lines and certain finishes can land in 5 or 7-year buckets. A study carves those out and accelerates the deduction. If the suite is used in your own trade or business, Section 179 may also reach qualifying property. This is general information, not tax advice. Run it with your CPA.
| BULLISH | Cost seg carve-outs plus live QOZ guidance give owners real, documented deduction mechanics. |
| Buford, GA | No new site data. Gwinnett County Public Schools redistricting plan dated September 23 is the only local signal. |
| Fort Mill, SC | Development moratorium ended October 1. A 270K sq ft project won approval October 7 despite organized resident opposition. |
| Concord / Lake Norman, NC | Divided board backed Lake Norman townhomes near a future CATS commuter rail station on September 23. Density is coming. |
| Forney, TX | No Forney-specific signal today. Watch Texas industrial starts given Prologis flagging a development slowdown. |
| Benton, KY | No Benton or Kentucky Lake data in today's feeds. Treat as unmeasured, not quiet. |
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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