Ackman-Ziff Market Update (August 2025)

Our last newsletter was cloudy with a chance of thunderstorms. This one? Still cloudy, but we’re starting to see some sun break through.

An economist might say July’s headlines continued the pattern of liquidity draining from the market. Here’s a quick recap of what we’ve been hit with over the past 30 days:

• Trump’s “Big, Beautiful Bill” passed congress, delivering significant cuts for high earners and ramping up deficit spending.

• The 10-Year Treasury nearly touched 4.50% in mid-July as inflation crept up and the market digested increased government spending.

• Powell held rates steady, citing uncertainty around the inflationary impact of new tariffs.

• Trump announced another sweeping round of tariffs, targeting trading partners that haven’t struck a deal with the U.S.

• Job growth was revised down sharply. May and June saw 43,000 new jobs combined, and July added only 73,000.

• Closed on an off-construction bridge BTR deal in Phoenix’s West Valley at a 7% debt yield. Priced in the low 300s over, implying lenders are comfortable earning ~8% total return for 2–3 years up to 80% of value on a lease-up BTR. (Note: the B-note likely yields ~12%.)

• Closed on pari passu construction financing for a BTR project in the Southeast. Yes, that’s right, pari to equity on construction! Mid-300s over, with earnouts and step-downs after TCO and lease-up milestones.

• Closed a $100M programmatic parking JV with an institutional operator, anchored by a recapped seed asset.

• Signed a term sheet for garden-style multifamily construction in suburban Austin. It’s arguably one of the hardest markets in the country to get a construction loan done.

• Received a term sheet for a common equity recap on a shallow-bay industrial portfolio in the Midwest.

• Received a pref equity term sheet for Brooklyn multifamily (pre-TCO) at up to a 6.25% last-dollar yield, sub-12% pricing, post-Mamdani’s primary win.

• Closed an anchored retail refinance in Northern California with an institutional JV partner at a sub-130 spread over the 5-year Treasury.

• Secured term sheets for a value-add office refinance in Midtown, NYC, providing the sponsor with 110% of future TI/LC funding (i.e., earnouts for good news).

• Received a term sheet for ground-up condo construction in Southern California at 85% LTC and low 600s over. Incredible leverage, especially given cost overruns due to land loan interest.

• Launched a Co-GP raise for a $380M Opportunity Zone high-rise in Boston. It pencils to a 6.25% ROC, and we’ve already seen strong interest from family offices and institutional players alike.

Deals are taking longer. Equity returns are thin. Processes that used to be competitive now have maybe 1-2 viable capital sources at the table. But the market is still alive, and valuations are slowly reawakening. Still, we can’t shake this feeling that we’re hanging on by a thread, like somethings bound to break. Until then, we’re still uncovering new, creative, and resilient sources of capital, and staying as busy as ever.

• A $3B+ institutional fund is actively investing LP equity into '70s and '80s vintage deals in core markets. Buying at 6.5% caps, financing at low 5s up to 65% LTC, stabilizing at 7.5% yields, underwriting 6.75% exits. That pencils to high-teens IRRs and 1.75x, a strategy starting to make sense again at reset values and tight agency spreads.

• Office is making a slow comeback. Each week, we’re hearing about more rational pricing and renewed capital interest. Two hedge funds are teaming with operators to buy slightly discounted office in LA and NYC (as equity). Long WALT, credit tenants, 40% discounts to 2021 values: this is where things are starting to work again.

• The “alts” are still the buzzwords in nearly every capital conversation: parking, data centers, IOS, MH, BTR, student housing, affordable, solar, the list grows.

• OZ funds are back in motion. With eyes on the 2027 tax vintage (and potential extensions beyond), many have already started forming fund docs and quietly raising.

We’re keeping all those affected by last week’s tragic shootings in our thoughts. Our hearts go out to the victims, their families, and the impacted communities.

Jordan Brustein; Andrew Rudy

E: [email protected]; [email protected]

M: (JB) 516-996-7722; (AR) 858-947-8738