Location Strategy Chartbook 07.04.2026

The unemployment rate fell to 4.2%, the lowest in a year.
Normally that's good news, but not this time.

-720,000 people left the labor force. They aren't even looking for jobs anymore.
-507,000 people are no longer employed.

The employment-to-population ratio fell to 59%, the lowest in about 5 years (since Oct. 2021).

Prime-age labor force participation rate June: 83.3%
Primage-age labor force participation rate May: 83.9%

US hiring slowed sharply in June even as the unemployment rate fell, curbing some of the budding momentum in job growth this year.

The Bureau of Economic Analysis’ initial report on consumer balance sheets for May revealed the first monthly increase in inflation-adjusted disposable personal income since before the start of the military conflict in Iran. Yet it was flat compared to a year ago.

Nominally, the increase was 0.7%, outpacing inflation for the first month since January. A one-time farm subsidy payment artificially boosted that total, more than doubling farm proprietors’ income and accounting for one-third of monthly personal income growth.

By comparison, wages and salaries, which typically account for the bulk of personal income, were flat on an inflation-adjusted basis.

Balances on consumer debt disproportionately held by lower-credit borrowers have moved higher.

Overall credit card balance growth has been stable over the past year, growing 5.9% annually through the first quarter, according to the Federal Reserve Bank of New York’s quarterly report on household debt and credit. Balances in the “other debt” category, which includes the unsecured personal loans lower-credit borrowers are more likely to take out, increased by 3.7% annually, the highest year-over-year increase since the first quarter of 2024.

Over the course of the past two decades, the US has lost 2,000 golf courses and 7,000 bars and nightclubs, and Americans now own 1.3 million fewer boats. It’s prohibitively expensive to open a new summer camp and practically impossible to build a beachfront resort or marina. Venue shortages afflict musicians looking for performance spaces, children looking to play in local sports leagues and adults looking to go out dancing. The best time to book a rental for this summer was last summer, and the best time to book for next summer is … well, it may already be too late.

America appears to be suffering from a fun shortage. For the industries supplying recreational amenities, this deficit is a business opportunity. But for everyone not positioned to profit from the trend, it’s a source of stress and frustration that’s been building for a while. It also has broad ramifications for the future of the economy, society and politics. On the eve of the country’s 250th birthday, it’s worth pondering whether the pursuit of happiness has become more difficult, writes Ben Steverman.

Invesco is accelerating its push into commercial real estate lending, pricing a $1.2 billion commercial real estate collateralized loan obligation backed by its fast-growing private credit real estate investment trust.

The deal, issued through Invesco Commercial Real Estate Finance Trust, or INCREF, marks the REIT's second CRE CLO in about 13 months and comes as its loan book has rapidly expanded. The lender also has a third transaction lined up for market, signaling plans to continue recycling capital into new loans.

INCREF's commercial real estate loan investments climbed to about $6 billion as of the end of May, up from $3.55 billion a year earlier — roughly a 70% increase, according to a filing with the Securities and Exchange Commission.

INCREF is the second-largest nontraded net asset value mortgage REIT, according to CoStar data. Among other growing nontraditional lenders, Federal Standard's FS Credit Real Estate Income Trust reported a nearly $8 billion loan portfolio in May, just about $500 million more than a year ago. Fortress Credit Realty Income Trust reported a portfolio of $2.9 billion, up from $1.3 billion a year ago.

The firm's real estate arm ranked fourth out of 30 firms in the Mortgage Bankers Association's 2025 origination rankings for investor-driven lenders — a group that includes REITs, debt funds, private credit firms and separately managed accounts — based on closed volume.

In May, INCREF closed five loans, including a $60 million loan on an industrial portfolio in Pompano Beach, Florida; a $115 million loan on a multifamily property in Philadelphia, Pennsylvania; a $74.7 million loan on a multifamily property in Brooklyn, New York; and $229.5 million across two loans on industrial portfolios spanning multiple U.S. markets.

The closed securitization, INCREF 2026-FL2, bundles 36 loans backed by 103 properties across 18 states and 29 metropolitan areas, according to a Fitch Ratings report. The portfolio is weighted about 65% to apartments and 30% to industrial, with just 3% allocated to office and 2% to self-storage, largely avoiding the struggling office sector.

The New York City region accounts for the largest geographic concentration at 15% of the pool, followed by greater Philadelphia at 8.9% and the Dallas market at 7.7%, according to Fitch.

The largest loan in the deal is a $371.4 million financing to Timberline Real Estate Ventures and Ares Management for a student housing portfolio comprising seven properties with 5,288 beds across Georgia, Texas, Oregon, North Carolina and South Carolina, Fitch said. The largest asset in that portfolio, The Hayward in Eugene, Oregon, formerly known as 13th & Olive, contains 1,308 beds.

KKR acquired apartment complexes in Seattle and its Eastside suburb, Redmond, amid signs that multifamily investment could be picking up in the region.

The New York City-based firm bought Cru at Willows in Redmond for $78 million and the Baldwyn apartments in Seattle’s Northgate neighborhood for $94 million in separate deals arranged by CBRE, according to King County property records.

The seller and developer of both properties, Seattle-based Goodman Real Estate, finished construction of the 195-unit Cru at Willows and the 235-unit Baldwyn in 2024.

The sales come as apartment transactions are showing signs of recovery after a period of softened demand and stalled rent growth in the Puget Sound region. Greater Seattle’s average apartment vacancy rate was 6.7% in the second quarter, edging down from 7.1% in the same period last year, according to CoStar.

The largest concentration of office loans in a commercial mortgage-backed securities deal this year is heading to market, a potential sign that Wall Street’s appetite for the long-troubled property type may be returning.

The deal, BANK5 2026-5YR23, includes $306.3 million in loans backed by office buildings — the highest office exposure in any multiborrower CMBS offering since October 2025, according to CoStar data. By comparison, similar transactions sold earlier this year had about $135.2 million in office loans on average, less than half the amount in this deal.

Morgan Stanley is leading the securitization, doing the job of bundling mortgages from multiple properties and selling the cash flows to bond investors. The bank’s willingness to take on heavier office exposure suggests a tentative shift in sentiment, even as risks in the sector persist.

A record 33% of household wealth is now held by Americans that are 70 years of age and older.

LS comment: There is an opportunity and market gap to build real estate targeted for the aging population. For master planned communities in ground up phases to think about how the aging population wants to interact with the built world. Moving to 55+ or senior housing is dreaded and considered waiting to die vs. many active seniors want to live in mixed demographic neighborhoods. However they need to be designed and built for changing mobility, healthcare needs, accessibility and options for the wide array of wants and needs. You cannot easily build this into communities after the fact. Where is parking, how many steps (not elevation but walking steps) to retail or units, where are elevators, how many flights of stairs, is there walkability or the option for not having to be car dependent? Where are the housing units sited within the community and what is the housing mix? Small 1 story single family built for accessibility with wider hallways, lower storage access, lower counters? Cottage courts, high density multifamily dispersed within the community and closer to outdoor amenities, community centers and retail? What are the amenities? Are they cost centers like gyms and dog runs OR revenue generating retail and services? Medical retail cannot be planned for after the fact on ground floor post tension slabs