The Real Signal #160 - Tech and Infrastructure Investment Super Cycle
Plus: Multifamily Supply Wave Has Crested And Families Are Moving Up
Tech and Infrastructure Investment Super Cycle
“It’s not just the AI hyper-scalers, whose extraordinary investment projections keep increasing as they compete for scale. It’s also the generational utility infrastructure upgrade under-way and the potential for massive domestic investments from other nations cutting deals to avert higher tariffs. Even if we’re reliving the dot com bubble, we may be at the beginning of 1998 (with a lot more room to run) than mid-2000 (end of the line).“
Scott Choppin Note: We are at the front edge of massive capital investment cycle. Not listed on the chart below, are AI-only companies and their collaborators: “The total spending plans involving OpenAI and its collaborators across various projects and infrastructure could approach $1 trillion over multiple years, reflecting the scale and ambition of current AI investments”
Multifamily Supply Wave Has Crested
“Cushman and Wakefield 2025 Report
“Renters continue to shrug off economic uncertainty, with net absorption on track for its third strongest year since 2000. More than 102,000 units were absorbed in the third quarter of 2025, marking the third straight quarter of more than 100,000 net move-ins this year. While the third quarter was 12% below the same period last year, apartment demand year-to-date (YTD) remains largely in line (down 4%) with last year’s near record-setting pace…
Owners, on the other hand, continue to prioritize occupancy over rent growth amid ongoing caution around the economic outlook. Though overall vacancy fell for the third consecutive quarter, rent growth softened further,registering just 1.5% year-over-year (YOY) growth in the third quarter, down from 2.2% earlier this yea…
The supply wave has crested. The third quarter brought 109,000 new deliveries, down 27% YOY. Estimates across all third-party data providers suggest quarterly deliveries will remain under 100,000 for the foreseeable future—signaling a meaningful slowdown in new supply.”
Scott Choppin Note: Bold emphasis in last paragraph is mine. As we’ve been saying, new supply is moderating, and beginning to be on par with absorption. We’ll need to see what 2026 looks like, to have a better sense of the longer term supply/demand balance equation. But with the almost total shutdown of new construction in the post-2022 era, we know for sure new supply is generally shut down.
Families Are Moving Up
“For the millionth time:
The middle class is smaller because the upper class is a lot bigger, and the lower class is smaller too.“
Scott Choppin Note: One interesting part of this change, is that while the upper class grew bigger, many lower class families moved into the middle class, i.e. everyone shifted upwards. Bottom line: the middle class is here to stay. Note that the calculation of wages are inflation adjusted, so this movement is NOT due only to inflation of nominal wages. This is bullish for the rental housing markets in the long run.
Are you a broker or lender working to increase the likelihood of successfully closing your clients project, while also maximizing your clients project and land value?
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Our project management and development services team can help brokers and lenders help their clients close deals and get projects built.
Some of our recent successes include:
Consulting for a SoCal land owner to maximize sale value through the completion of entitlements on an ED1 project, after a failed developer escrow. This land owner will double his land value in sale, from $10M raw land value, to $20M post-entitlement value.
Consulting for a land owner to create a land entitlement strategy and underwriting to sell his land to the homebuilder. Our help created over $5M of profits to the land owner.
Advising a developer stuck on a local city 3-year entitlement process, so he can close his loan and start construction. With our help, this project complete the city process and launch in under 2 months, after working on their own for nearly 3-years.
Consulting to create and develop a new housing innovation for a developer, that will capture a rapidly evolving market innovation in California. This specific example will create two very rapid land sales for the brokers involved in the land transactions.
In all these cases, we enabled brokers and lenders to close their deals rapidly and helped maximize their clients deal values with our unique project services approach.
Email us now to set up a call, we can help your project: choppin@urbanpacific.com
Do You Know a Land Owner, Business Owner, or Developer That is Stuck on Their Development Project?
We Can Help Them Succeed
We have expanded our team for our project management and development services offer, to help us serve more clients in the future.
Our project services clients include:
non-developers
new developers
folks who have gotten stuck in their development and planning process.
Some of our recent work includes helping the San Pedro Fish Market with their Phase 2 project at the LA Harbor in San Pedro, including design management and entitlements. We are also the real estate advisor on their redevelopment of a brand new location on the historic Fisherman's Wharf in Monterey, and we completed a project for them at the former Joe's Crab Shack in Long Beach at Alamitos Bay (see flyer below)
We are working on numerous housing deals as an advisor as well.
Send me an email if we can be of help on your project: choppin@urbanpacific.com
