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Monthly Market Review: September 2026

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# Monthly Market Review: September 2026

> **EDUCATIONAL MATERIAL — NOT AN OFFER, NOT ADVICE.** Educational market commentary for United States accredited investors. It is **not** an offer to sell or a solicitation of an offer to buy any security, and it is **not** investment, legal, tax, or financial advice or a recommendation of any strategy. Any securities offering by Investo Capital or its affiliates is made only under Rule 506(c) of Regulation D, to **verified accredited investors**, through definitive offering documents (including a Private Placement Memorandum) that control in all respects. Real estate investment involves substantial risk, including illiquidity and the **possible loss of some or all principal invested.** Content on non-US (including Israeli) markets is provided for context only; foreign real estate, securities, and currency exposure carry additional risks, including exchange-rate, tax, legal, and geopolitical risks, and none of this is tax or cross-border legal advice. No return, income, or appreciation is projected, promised, or guaranteed. Forward-looking statements are inherently uncertain and may prove incorrect. Every figure is drawn from a named third-party public source with its scope and date stated; figures may contain errors or become outdated and should be independently verified before any decision. *Compliance information, not legal advice.*

**Coverage:** United States and Israel real estate markets **Publication date:** September 8, 2026 **Audience:** United States accredited investors (educational use)

Executive Summary

The defining feature of the real estate landscape this month is a divergence in the direction of monetary policy on the two sides of the Atlantic, and that divergence is now the single most important variable for a cross border real estate investor to understand. In the United States, the Federal Reserve is holding rates high in the face of stubborn inflation, and the market is actually pricing some probability of a further increase at the meeting on September 15 and 16, a meeting that has not yet occurred as of this writing. In Israel, the central bank is cutting, having lowered its policy rate for a third consecutive meeting on September 1, 2026. The result is a United States market where the cost of capital remains a headwind and an Israeli market where falling rates are beginning to thaw a housing market that had been sliding.

In the United States, the story is one of a slow, uneven recovery in fundamentals fighting against a high cost of debt. Apartment demand has been genuinely strong, with net absorption running well ahead of a shrinking supply pipeline, yet headline rent growth remains near flat because the last wave of new deliveries is still being digested, most acutely across the Sun Belt. The for sale housing market is nearly frozen at the transaction level, with existing home sales stuck near a four million annual pace and mortgage rates back near 6.7 percent, even as prices continue to grind slightly higher on chronic undersupply. Commercial real estate has quietly turned a corner: office vacancy fell by the most in a decade, industrial vacancy declined for the first time in three years, and transaction volume is climbing off its trough.

In Israel, the picture is a war scarred economy rebounding hard. Gross domestic product surged at a 15.4 percent annualized pace in the second quarter after a first quarter contraction tied to the February to April conflict with Iran, inflation has fallen to 1.5 percent, and the shekel has strengthened to a thirty year high against the dollar. That currency move is reshaping capital flows in both directions: it has cooled American demand for Israeli apartments while making the Tel Aviv Stock Exchange an ever more active venue for United States real estate firms raising dollar denominated debt. The specific figures that follow carry their scope, their period, and their meaning for an investor, each drawn from a named public source.

US Macro Backdrop

The United States economy is growing, but slowly, and inflation has proven sticky enough to keep the Federal Reserve on hold rather than cutting. The Bureau of Economic Analysis reported that real gross domestic product expanded at a 1.5 percent annualized rate in the second quarter of 2026 in its second estimate released on August 26, a deceleration from the 2.1 percent pace of the first quarter, with the third and final estimate not scheduled until September 30. That is growth consistent with an economy that is expanding but has lost momentum, the kind of soft landing that supports occupancy without generating the income gains that drive rapid rent increases.

The labor market tells the same measured story. The Bureau of Labor Statistics reported that the economy added 162,000 nonfarm payroll jobs in August 2026 and that the unemployment rate held at 4.1 percent, in the release published September 4. Job growth at that pace is enough to keep the labor market roughly in balance without adding inflationary pressure, which is precisely the condition the Federal Reserve has said it wants to see before easing. The persistent problem is prices. The table below sets out the most recent inflation readings against the Fed's target.

Headline consumer price inflation of 3.4 percent in the twelve months ending July 2026, per the Bureau of Labor Statistics release of August 12, remains well above the Federal Reserve's 2 percent goal, and core inflation of 2.5 percent, while closer, has not yet returned to target. The monthly readings of plus 0.1 percent headline and plus 0.2 percent core suggest the pace has moderated recently, but the year over year figure is what anchors policy, and it is too high to permit the Fed to declare victory. For a real estate investor, the meaning is direct: inflation this far above target is what keeps long term interest rates elevated, and elevated long term rates are the primary force holding down property values and transaction activity. The macro backdrop is neither a boom nor a bust; it is a stall in which the cost of money, not the strength of demand, is the binding constraint.

US Interest Rates and Capital Markets

Monetary policy is the pivot around which every other United States real estate figure turns this month, and the posture is restrictive. At its most recent completed meeting on July 28 and 29, 2026, the Federal Open Market Committee held the federal funds target range at 3.50 percent to 3.75 percent, where it has stood since December 2025, per the Federal Reserve statement of July 29. The vote is worth dwelling on: it was 9 to 3, with three members, Beth Hammack, Neel Kashkari, and Lorie Logan, dissenting in favor of a 25 basis point increase, not a cut. The committee's own statement described inflation as remaining elevated relative to its 2 percent goal, in part reflecting supply shocks in sectors including energy.

The rate environment flows straight through to the cost of real estate debt. The table below assembles the current benchmark rates.

The ten year Treasury par yield stood at 4.78 percent at the official Treasury close on September 4, 2026, and the thirty year fixed mortgage rate averaged 6.71 percent in the Freddie Mac Primary Mortgage Market Survey for the week ending September 3, up from 6.66 percent the prior week, with the fifteen year fixed at 6.04 percent. Mortgage rates near 6.7 percent are the practical reason the for sale housing market is so quiet. On the application side, the Mortgage Bankers Association reported for the week ending August 28 that its total application index rose 0.8 percent and its purchase index rose 2 percent from the prior week, while its refinance index fell 1 percent on the week and was down 19 percent from a year earlier. That refinance collapse is the signature of a market where almost no existing borrower has an incentive to refinance a mortgage into a higher rate. For an investor, the capital markets message is that debt remains expensive, that the ten year Treasury near 4.8 percent sets a high floor under commercial mortgage costs and therefore under cap rates, and that the Fed has given no signal it intends to relieve that pressure soon.

US Multifamily and Rental Market

The apartment sector presents the clearest example this month of strong fundamentals colliding with a supply overhang. Demand has been excellent. RealPage reported net absorption of more than 187,000 units in the second quarter of 2026, well above the norm for the spring leasing season, and national occupancy of 95.5 percent, its second consecutive quarterly gain and slightly ahead of the decade average. CoStar, using a broader inventory that includes properties still in lease up, reported net absorption near 164,000 units in the quarter, up 13 percent year over year, with demand exceeding new supply by more than 45,000 units. The two data providers differ on the level of vacancy because they track different property sets, but they agree that renters are filling apartments faster than developers are delivering them.

Yet rent growth remains muted, because the market is still absorbing the largest construction wave in four decades. The table below assembles the leading rent and occupancy measures.

The spread between Yardi Matrix's plus 0.2 percent and Zillow's plus 2.3 percent year over year reflects methodology, with the Zillow index blending single family rentals that are running hotter than apartments, while RealPage's effective rent measure was actually down 0.2 percent year over year on a same store basis. The supply story is the key to the forward view. RealPage reported annual deliveries of 340,200 units in the year ending the second quarter, the sixth consecutive quarter of declining supply and far below the 2024 peak near 588,000 units, while CoStar reported quarterly completions near 118,000 units, down 22 percent year over year. Concessions remain a live feature of the market, with RealPage reporting that 24.6 percent of apartments offered a concession averaging 7.6 percent of the lease. The investor conclusion is a market at an inflection point: demand is robust, the supply wave is receding fast, and the combination is consistent with a return of pricing power once the current deliveries lease up, even though the present moment still shows flat headline rents and meaningful concessions in the highest supply markets. This is an interpretation of current and past data, not a forecast that pricing power will in fact return.

US Single Family and For Sale Market

The market for existing homes is close to frozen, held in place by the collision of 6.7 percent mortgage rates against homeowners locked into far cheaper loans. The National Association of Realtors reported existing home sales at a seasonally adjusted annual rate of 4.06 million units in July 2026, down 1.7 percent from June but up a marginal 0.7 percent from a year earlier, a pace that remains near the lowest in three decades. What is striking is that prices keep rising anyway. The NAR median existing home price reached 434,100 dollars in July, up 2.0 percent year over year and marking the thirty seventh consecutive month of annual price increases, with total inventory of 1.54 million units representing 4.6 months of supply, still below the roughly six months that denotes a balanced market.

The broader price indices confirm modest, decelerating appreciation, and the new construction data confirm a sharp pullback in supply. The table below assembles the key readings.

Home price appreciation has cooled to the low single digits, with the S&P Cotality Case Shiller national index up 1.5 percent year over year in June 2026 and the Federal Housing Finance Agency index up 2.1 percent for the year ending the second quarter. Beneath the national average sits sharp regional divergence, which the Case Shiller data captured with Chicago the strongest metro at plus 6.9 percent and Seattle the weakest at minus 2.0 percent year over year. The new construction figures are the most consequential for the medium term. Census and HUD reported that housing starts fell to a 1.239 million annual rate in July, down 13.5 percent from a year earlier, and new single family home sales fell to 607,000, down 6.3 percent, even as building permits ticked up 3.1 percent. Builders are pulling back on breaking ground in the face of high financing costs and soft affordability, which reduces future supply and reinforces the persistent undersupply that has kept prices from falling. For an investor, the takeaway is a for sale market where transaction volume is depressed but downside price risk has to date been limited by scarcity, a condition that keeps would be buyers in the rental pool and is relevant to the single family rental and build to rent theses; scarcity is a present condition, not a guarantee against future price declines.

US Commercial Real Estate

Commercial real estate quietly reached a turning point in the second quarter of 2026, and the improvement was broad based across office, industrial, and retail. Office, the sector that had been in distress since the shift to remote work, posted its best quarter in years. CBRE reported that national office vacancy fell to 18.3 percent, a decline of 30 basis points from the prior quarter and the largest quarterly drop since 2015, with prime office vacancy down 40 basis points to 12.3 percent, net absorption of 12.6 million square feet marking a ninth consecutive positive quarter, and average asking rent up 2.6 percent year over year to 37.58 dollars per square foot. JLL corroborated the direction, reporting a roughly 60 basis point quarterly decline in total vacancy and leasing activity at a post pandemic high. The recovery is uneven, concentrated in the highest quality buildings, but the direction has clearly changed.

The table below assembles the second quarter figures across the three major commercial sectors.

Industrial turned a corner as well, with CBRE reporting vacancy of 6.5 percent, down 20 basis points and the first decline since the second quarter of 2022, alongside second quarter leasing of 268.7 million square feet, up 11 percent year over year, and first half leasing up 18 percent. JLL placed industrial vacancy slightly higher at 6.8 percent with average asking rent of 10.45 dollars per square foot, and noted that large format logistics facilities, its Class A warehouses over one million square feet, were tighter at 5.8 percent. Retail remains the steadiest sector of all, with CBRE reporting availability of 4.9 percent, average asking rent up 2.4 percent year over year to 24.79 dollars per square foot, and a fourth consecutive quarter of positive net absorption, while Colliers data placed retail vacancy at 4.4 percent and net absorption at 10.2 million square feet in the quarter, a reflection of the fact that almost no new retail has been built in a decade. On pricing, the CBRE Cap Rate Survey for the first half of 2026 found national average cap rates roughly flat, with neighborhood retail, hotel, and industrial compressing most, and lower quality office and infill multifamily the most bearish, while about 60 percent of respondents expected cap rates to hold steady over the following six months. The Green Street Commercial Property Price Index rose 0.8 percent in August 2026 and was up 5.0 percent over the trailing twelve months, a recovery in values, while the MSCI Real Capital Analytics index showed a slower plus 0.2 percent year over year with a wide dispersion in which central business district office led at plus 9.9 percent and apartments lagged at minus 4.4 percent. The investor conclusion is that commercial fundamentals have been healing across the board, that the recovery is concentrated in quality, and that values have begun to rise again even though the high cost of debt continues to cap how far and how fast; none of this is an assurance that the recovery will continue.

US Transaction Volume and Capital Flows

Transaction activity is climbing off the trough it reached in 2023 and 2024, which is itself a meaningful signal that buyers and sellers are finding common ground on price despite the high cost of debt. MSCI Real Capital Analytics, as analyzed by Colliers, reported total United States commercial property investment volume of 113.7 billion dollars in the second quarter of 2026, up 9 percent year over year, with the growth lifted by large entity level and take private deals involving companies such as Veris Residential, ECHO Realty, and Peakstone Realty Trust. CBRE, using its own methodology, reported year to date investment volume of 250.3 billion dollars through the first half of 2026, up 21 percent year over year, and noted that its overall cap rate ticked up to 6.3 percent from 6.0 percent, a reminder that even as volume rises, buyers are demanding higher yields to compensate for expensive financing.

The multifamily sector, the largest single destination for capital, tells a more nuanced story of volume that is flat to slightly down but stabilizing. The table below assembles the transaction figures.

Multifamily transaction volume was 36.7 billion dollars in the second quarter per MSCI, essentially flat at up 1 percent year over year, while CBRE's measure of 34.9 billion dollars was down 2.7 percent, with the difference reflecting methodology; either way, apartments remained the largest sector at roughly 27 percent of all volume. The apartment average cap rate held at 5.9 percent per MSCI, and the apartment price index was still down 1.7 percent year over year, marking two full years of negative readings, though the pace of decline has flattened. MSCI noted that garden apartment volume actually fell 21 percent year over year and that portfolio sales dropped 16 percent, meaning the headline stability was carried by a handful of large corporate transactions rather than a broad based recovery in individual asset trading.

Israel Macro Backdrop

The Israeli macro backdrop is the mirror image of the American one, and understanding that contrast is essential. Where the United States is holding rates high against sticky inflation, Israel is cutting rates into falling inflation and a powerful economic rebound. The Bank of Israel lowered its policy interest rate by 25 basis points to 3.25 percent on September 1, 2026, its third consecutive cut, bringing the rate to its lowest level since 2022, after an earlier reduction to 3.50 percent on July 6. The central bank has cited a strengthening shekel, inflation running below the upper bound of its target, lower energy prices, and a reduced Israel risk premium as the conditions permitting it to ease.

The economic data behind those cuts are dramatic, shaped by the war with Iran that ran from late February to early April 2026. The table below assembles the key Israeli macro readings.

The Israel Central Bureau of Statistics reported that gross domestic product surged at a 15.4 percent annualized rate in the second quarter of 2026, a sharp rebound from a 2.2 percent contraction in the first quarter that was tied to the February to April conflict, with the rebound driven by private consumption up 14.7 percent, government consumption up 19.5 percent, and exports excluding startups and diamonds up 25.2 percent. Inflation fell to 1.5 percent year over year in July, down from 1.6 percent in June and the lowest reading in roughly five years, comfortably inside the 1 to 3 percent target band, and the unemployment rate was 3.1 percent, a very tight labor market. For a real estate investor, the meaning is that Israel is entering an easing cycle just as its economy accelerates out of a wartime shock, a combination that has historically supported asset values and, specifically, is beginning to revive a housing market that had spent the prior year in decline. Historical patterns are context, not a prediction of Israeli asset performance.

Israel Residential Market

The Israeli housing market spent much of the past year falling and is now showing the first tentative signs of stabilizing as interest rates come down. The Israel Central Bureau of Statistics dwelling price index, in its most recent reading covering May and June 2026 and published September 4, was down 1.5 percent year over year but edged up 0.1 percent versus the prior two month period, a marginal gain that followed a 1.0 percent two month decline in the April to May reading that had been the steepest such drop in eight years. In other words, prices are down over the year but appear to have stopped falling on a monthly basis, which is consistent with what one would expect as the Bank of Israel's rate cuts begin to work through the mortgage market.

The transaction data show demand returning forcefully. The table below assembles the residential figures.

The Israel Ministry of Finance reported that 8,757 apartments were sold in June 2026, up 50 percent from June 2025, of which 3,593 were new apartments, a striking 84 percent annual increase, with secondhand sales of 5,164 up 33 percent, though it bears noting that June 2025 was a low activity wartime base that inflates the year over year comparison. That surge in activity, set against prices that are only marginally lower, signals a market where buyers who had waited on the sidelines are returning as borrowing costs fall. Mortgage lending confirms it, with the Bank of Israel showing roughly 9.7 billion shekels in new mortgages in May 2026, up 19 percent year over year, after a record single month of 11.17 billion shekels in December 2025 that ran about 26.5 percent above the monthly average. On the supply side, dwelling starts ran at a rolling twelve month pace near 76,470 units through March 2026, down from the all time record of 81,020 set in the year ending September 2025, with roughly 211,710 homes under active construction, an enormous pipeline that reflects both the record starts of prior years and the wartime labor disruptions that have slowed completions. Rents, meanwhile, rose 4.4 percent year over year per economists at Bank Hapoalim, outpacing sale prices. The investor conclusion is a residential market at a turning point, with falling rates reviving transaction volume and rents, and prices apparently finding a floor, though the very large construction pipeline is a source of future supply that bears watching.

Israel Commercial and Investment Market

The Israeli commercial market is being pulled in two directions at once, with a booming defense technology sector driving prime Tel Aviv offices to near full occupancy while secondary locations and peripheral cities soften. A Newmark Natam survey reported by Globes found that overall Tel Aviv office occupancy rose from 96 percent to 99 percent in the first half of 2026, with premium corridors such as Menachem Begin Street, Yigal Alon, and the Hassan Arafa area all at 99 percent, driven by demand from defense technology firms expanding after the war. Prime rents rose accordingly, with Menachem Begin Street reaching 151 shekels per square meter, up 3 percent from the prior half, even as peripheral markets moved the other way, with Herzliya Pituah down 4 percent to 96.8 shekels and Rehovot and Ness Ziona down 9 percent. The bifurcation is stark, with strength concentrated in the core while individual secondary and peripheral towers reported markedly weaker occupancy, though specific building level occupancy figures for those secondary assets could not be confirmed from a public source and are not stated here.

The public markets and the largest property companies tell a story of a sector in favor with investors. The Tel Aviv Stock Exchange launched a new TA Real Estate 35 index in November 2025 covering the thirty five largest real estate firms with a combined market capitalization near 237 billion shekels, and the broader real estate index had risen 36 percent since the start of 2025 at that launch, with real estate representing roughly 18 percent of total exchange market capitalization. The largest operators are performing well. Azrieli Group reported for the second quarter of 2026 that its Israeli office portfolio of 655,000 square meters was 96 percent occupied, that space vacated by Meta had been re leased at higher rents, and that mall and retail net operating income rose 9 percent year over year to 261 million shekels, while Melisron reported 99 percent occupancy across eighteen malls with store sales of 5 billion shekels in the first half. The one clear risk to the commercial picture is construction itself, where a war driven labor shortage cut the entry of Palestinian workers to roughly 8,000 from prewar levels and forced a doubling of foreign construction workers to about 25,000 by April 2026, and where the industry is forecast to contract 1.5 percent in real terms in 2026 amid elevated costs and reduced infrastructure budgets. For an investor, the Israeli commercial data describe strength concentrated in prime Tel Aviv income producing assets, where a defense technology boom has generated real rent growth, alongside notable weakness in secondary and peripheral office space and heightened risk in development exposed to a labor constrained construction sector.

Cross Border Capital Flows Between Israel and the United States

The flow of real estate capital between Israel and the United States is unusually active and runs strongly in both directions, and the dominant force shaping it this year is the strength of the shekel. On the outbound side, Israeli investors are deploying more capital into United States commercial property. JLL data reported by Ynetnews found that Israeli investment into United States commercial real estate roughly doubled to about 1.06 billion dollars in 2025 from about 529 million dollars in 2024, lifting Israel to eighth among foreign investors in United States commercial real estate, with Israeli global outbound capital concentrated in industrial and logistics at 885 million dollars and offices at 853 million dollars. A representative institutional example was Menora Mivtachim's commitment of more than 50 million dollars to a United States logistics fund managed by Hillwood.

Running the other way, and far larger, is the long standing practice of United States real estate firms raising dollar denominated debt on the Tel Aviv Stock Exchange, a market sometimes called the Wall Street of the Middle East. The table below assembles the key figures.

The Commercial Observer reported that global bond issuance on the exchange, of which 80 to 90 percent comes from real estate firms, reached nearly 4 billion dollars in 2025, a 46 percent annual increase, and is projected to grow to about 4.4 billion dollars in 2026, with more than 20 billion dollars raised across over 130 bond series in the past decade and nine new issuers entering in 2025 alone. Recent deals include Greystone's 193 million dollar issuance in February 2026 and Lightstone's 110 million dollar offering the same month, while Silverstein Properties has raised more than 600 million dollars to date. That market carries real risk, illustrated vividly by Simad Holdings, a United States summer camp operator that raised 620 million shekels in December 2025 and then defaulted and filed for Chapter 11 bankruptcy in New Jersey in June 2026 after money was transferred to owner controlled accounts, a cautionary illustration of the credit quality of some issuers. The overriding theme is currency. The shekel has strengthened more than 20 percent against the dollar over the trailing year to reach a thirty year high near 3.00 to the dollar, a move that has simultaneously made it more attractive for Israeli investors to buy dollar assets while cooling American demand for Israeli property, as detailed in the next section, and raising the cost for dollar earning issuers to service shekel denominated bonds. For an investor, the cross border corridor is deep and liquid but demands attention to both issuer credit quality and the direction of the exchange rate.

Regional Highlights

Regional divergence is the dominant theme within the United States market this month, and it runs consistently across both the rental and the for sale markets: the coastal gateway metros are leading while the high supply Sun Belt lags. This is a reversal of the pandemic era pattern, when Sun Belt boomtowns led on both rent and price growth, and it reflects the fact that the enormous apartment construction wave was concentrated in exactly those Sun Belt markets, which are now digesting the oversupply. The table below assembles apartment rent growth across leading and lagging metros.

CoStar reported that San Francisco led all major metros with apartment rent growth of 10.9 percent year over year in July 2026, followed by San Jose at 6.8 percent, while San Antonio was the weakest at minus 3.0 percent, with Denver, Las Vegas, Austin, and Phoenix all showing rent declines. RealPage confirmed the pattern through August, reporting that the Midwest led all regions at 2 percent annual rent growth, with Milwaukee at 5.1 percent and Chicago at 2.6 percent, while the South was the only region still cutting rents and the only region with occupancy below 95 percent, and San Antonio the hardest hit large metro at minus 3.7 percent with occupancy of 93.1 percent. The same geography governs home prices. Redfin reported national home price growth of 3.4 percent year over year in July 2026, the fastest in a year, but with San Francisco leading at plus 13.3 percent, Chicago at plus 9.5 percent, and the Texas metros declining, with San Antonio at minus 2.1 percent, Fort Worth at minus 1.3 percent, and both Dallas and Austin at about minus 1.0 percent.

For the investor base of this firm, South Florida deserves specific attention, and its data are themselves divergent. Redfin reported that West Palm Beach was the fifth strongest metro in the country at plus 8.9 percent year over year. Within the rest of the region the picture was mixed, with Redfin's own index showing Tampa up 3.7 percent and Orlando up 0.2 percent over the year, both decelerating toward flat. Zillow's home value index for the Miami area showed the city of Miami down 1.2 percent over the year to an average value near 581,864 dollars, even as Miami Dade County was modestly positive at about plus 2.2 percent, a divergence that reflects the softening of the most expensive urban core against continued, if slower, strength in the broader county. The investor conclusion is that geography has been the single most important driver of return within the United States, that the gateway markets have shown rent and price momentum while the Sun Belt has priced for its current oversupply, and that even within a single region such as South Florida the dispersion is wide enough to require submarket level analysis. These are descriptions of past and current data, not forecasts of future returns in any metro.

Risks to Watch

The risks that matter most this month are led by the United States interest rate path, which is genuinely two sided in a way it has not been for some time. The Federal Reserve held rates in July with three members dissenting in favor of a hike, and inflation at 3.4 percent remains well above target, so the risk is not merely that rate cuts are delayed but that the next move could be an increase, which would push mortgage and commercial financing costs higher, further depress transaction volume, and put renewed downward pressure on property values. This is the dominant risk to the United States real estate outlook, and it is a change from the prevailing assumption of a year ago that the next move would be a cut.

A second risk is the United States apartment supply overhang, which, although receding, is still weighing on rents across the Sun Belt and will continue to suppress pricing power in those specific markets until the current deliveries are fully absorbed. A third is the frozen state of the for sale housing market, where existing home sales near a four million annual pace reflect a mortgage lock in effect that could persist for years and that constrains the mobility on which a healthy housing market depends. In the commercial arena, the office recovery, though real, remains concentrated in the highest quality buildings, and a large stock of older, lower quality office space faces continued distress and possible obsolescence.

In Israel, the risks are distinct. The most concrete is the construction sector, which faces a persistent labor shortage stemming from the sharp reduction in Palestinian workers, is forecast to contract 1.5 percent in real terms in 2026, and carries an enormous pipeline of more than 211,000 homes under construction that a constrained labor force must complete. A second is geopolitical: the economy rebounded 15.4 percent in the second quarter precisely because it was recovering from a wartime contraction, and the region's security situation remains a source of tail risk that can disrupt construction, demand, and capital flows without warning. A third, running through the cross border corridor, is the strength of the shekel, which near a thirty year high raises the burden on dollar earning issuers servicing shekel bonds and has already begun to cool foreign demand for Israeli property. For an investor with exposure on both sides, the combination to watch is a United States market where the risk is that rates stay high or rise, and an Israeli market where the risks are operational and geopolitical as well as monetary. Any of these risks, in either market, could reduce income or value or result in loss of invested capital.

Investor Implications

The through line for an accredited investor this month is that the cost and direction of capital, not the strength of tenant demand, has been the binding constraint in the United States, while in Israel a genuine easing cycle is beginning to lift a market recovering from a wartime shock. In the United States, the practical implication is to underwrite conservatively on financing, assuming that debt near current levels, with the ten year Treasury near 4.8 percent and mortgage rates near 6.7 percent, persists rather than falls, and to recognize that the recent widening of cap rates to 6.3 percent overall and 5.9 percent for apartments has repriced assets to levels that more readily clear against that expensive debt. The apartment sector in particular presents a data set worth close attention: demand is strong, the supply wave is receding fast with deliveries down to 340,200 units annually from a peak near 588,000, and the combination is consistent with a return of pricing power once the current cohort leases up, with entry points that vary widely by metro, including the Sun Belt markets whose current rent declines reflect a supply glut that is now shrinking. This is a framing of the evidence, not a recommendation or a prediction.

On property type, the data describe multifamily and necessity retail as the US sectors with the firmer current fundamentals, with retail vacancy near the mid 4 percent range reflecting a decade of almost no new construction, industrial as a sector whose vacancy has declined for the first time in three years, and office beyond the highest quality assets as the sector warranting the most caution despite the encouraging headline improvement. In Israel, the data show falling rates coinciding with reviving transaction volume, up 50 percent year over year in June, and rents up 4.4 percent, while prices appear to have found a floor on the readings to date, a picture relevant to income producing residential and to prime Tel Aviv office space benefiting from the defense technology boom, and one tempered by the construction labor shortage and by foreign market and currency risk. For the cross border investor, the strength of the shekel is the variable to monitor above all, because it governs the relative attractiveness of dollar versus shekel assets and the credit health of the many United States real estate firms that fund themselves in Tel Aviv. As always, this analysis frames the evidence; the decision to enter any market or pursue any asset rests with the investment principals and their own advisors, and every figure here should be independently verified before any commitment.

Conclusion

The United States is holding rates high against inflation of 3.4 percent, with a for sale market frozen near a four million annual sales pace, an apartment market with strong demand but flat rents as it digests a historic supply wave, and a commercial sector that has quietly begun to recover, with office vacancy posting its largest decline in a decade and transaction volume climbing 9 percent year over year. Israel is cutting rates into an economy that rebounded 15.4 percent in the second quarter, with inflation at a five year low of 1.5 percent, a housing market where sales jumped 50 percent year over year as buyers returned, and a shekel at a thirty year high that is reshaping capital flows in both directions. Neither market is without risk, with the United States facing a two sided interest rate path and a persistent supply overhang in the Sun Belt, and Israel facing a labor constrained construction sector and ongoing geopolitical tail risk.

Sources

• US Bureau of Labor Statistics, Consumer Price Index Summary, July 2026: https://www.bls.gov/news.release/cpi.nr0.htm

• US Bureau of Labor Statistics, Employment Situation Summary, August 2026: https://www.bls.gov/news.release/empsit.nr0.htm

• US Bureau of Economic Analysis, GDP Second Estimate, 2nd Quarter 2026: https://www.bea.gov/news/2026/gdp-second-estimate-and-corporate-profits-2nd-quarter-2026

• Federal Reserve, FOMC statement, July 29, 2026: https://www.federalreserve.gov/newsevents/pressreleases/monetary20260729a.htm

• Federal Reserve, Implementation Note, July 29, 2026: https://www.federalreserve.gov/newsevents/pressreleases/monetary20260729a1.htm

• US Department of the Treasury, Daily Treasury Par Yield Curve Rates, September 2026: https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value_month=202609

• Freddie Mac, Primary Mortgage Market Survey, week ending September 3, 2026: https://www.globenewswire.com/news-release/2026/09/03/3356148/0/en/mortgage-rates-average-6-71.html

• Mortgage Bankers Association, Weekly Mortgage Applications Survey, week ending August 28, 2026: https://www.mba.org/news-and-research/newsroom/news/2026/09/02/mortgage-applications-increase-in-latest-mba-weekly-survey

• Yardi Matrix, National Multifamily Report, July 2026 (via Multifamily Dive): https://www.multifamilydive.com/news/multifamily-rents-july-yardi/827341/

• Zillow Research, July 2026 Rent Report: https://www.zillow.com/research/july-2026-rent-report-36631/

• RealPage Market Analytics, 2nd Quarter 2026 Data Update: https://www.realpage.com/analytics/2q-2026-data-update/

• CoStar Group and Apartments.com, Multifamily Rent Growth Report, July 2026: https://www.costargroup.com/press-room/2026/apartmentscom-releases-multifamily-rent-growth-report-july-2026

• CoStar Group and Apartments.com, Multifamily Vacancy Update, Q2 2026: https://www.costargroup.com/press-room/2026/apartmentscom-and-costar-release-multifamily-vacancy-update-q2-2026

• National Association of Realtors, Existing Home Sales, July 2026: https://www.nar.realtor/newsroom/nar-existing-home-sales-report-shows-1-7-decrease-in-july

• S&P Dow Jones Indices, S&P Cotality Case-Shiller Home Price Index, June 2026: https://press.spglobal.com/2026-08-25-S-P-Cotality-Case-Shiller-Index-Reports-Annual-Gain-in-June-2026

• Federal Housing Finance Agency, House Price Index, Q2 2026: https://www.fhfa.gov/news/news-release/u.s.-house-prices-rise-2.1-percent-year-over-year-up-0.3-percent-quarter-over-quarter

• US Census Bureau and HUD, Monthly New Residential Sales, July 2026: https://www.census.gov/construction/nrs/pdf/newressales.pdf

• US Census Bureau and HUD, Monthly New Residential Construction, July 2026: https://www.census.gov/construction/nrc/pdf/newresconst.pdf

• CBRE, Q2 2026 US Office Market Report: https://www.cbre.com/insights/figures/q2-2026-us-office-market-report

• CBRE, Q2 2026 US Industrial and Logistics Market Report: https://www.cbre.com/insights/figures/q2-2026-us-industrial-and-logistics-market-report

• CBRE, Q2 2026 US Retail Figures: https://www.cbre.com/insights/figures/q2-2026-us-retail-figures

• Colliers, Q2 2026 US Retail Market Statistics: https://www.colliers.com/en/research

• CBRE, US Cap Rate Survey H1 2026: https://www.cbre.com/insights/reports/us-cap-rate-survey-h1-2026

• CBRE, Q2 2026 US Capital Markets Report: https://www.cbre.com/insights/figures/q2-2026-us-capital-markets-report

• JLL, US Office Market Dynamics, Q2 2026: https://www.jll.com/en-us/insights/market-dynamics/office-market-statistics-trends

• JLL, US Industrial Market Dynamics, Q2 2026: https://www.jll.com/en-us/insights/market-dynamics/industrial-market-statistics-trends

• Green Street, Commercial Property Price Index, August 2026: https://www.greenstreet.com/values-increase-5-over-the-past-12-months/

• MSCI Real Capital Analytics, US Capital Trends Q2 2026 (via Colliers Knowledge Leader): https://knowledge-leader.colliers.com/steig_seaward/msci-q2-2026-entity-deals-lift-volume-as-sector-recoveries-diverge/

• MSCI Real Capital Analytics, apartment transactions Q2 2026 (via Multifamily Dive): https://www.multifamilydive.com/news/apartment-prices-multifamily-sales-veris-residential/826271/

• Bank of Israel, Monetary Committee decision, July 6, 2026: https://www.gov.il/en/pages/boi-monetary-committee-decides-to-lower-the-interest-rate-6-jul-2026

• Bank of Israel, September 1, 2026 rate decision (via Bloomberg): https://www.bloomberg.com/news/articles/2026-09-01/israel-slashes-interest-rates-for-third-consecutive-meeting

• Israel Central Bureau of Statistics, inflation July 2026 (via Globes): https://en.globes.co.il/en/article-israels-inflation-rate-falls-to-15-1001552393

• Israel Central Bureau of Statistics, Q2 2026 GDP (via Globes): https://en.globes.co.il/en/article-israels-economy-grew-at-154-in-q2-1001552422

• Israel Central Bureau of Statistics and Ministry of Finance, housing snapshot September 2026 (via The Times of Israel): https://www.timesofisrael.com/housing-snapshot-september-2026-prices-inch-upward-after-sharp-decline/

• Bank of Israel, mortgage and household debt statistics: https://www.boi.org.il/en/communication-and-publications/press-releases/16-3-25en/

• Newmark Natam Tel Aviv office survey, H1 2026 (via Globes): https://en.globes.co.il/en/article-defense-tech-boom-pushes-up-tel-aviv-office-rents-1001554326

• Tel Aviv Stock Exchange, TA Real Estate 35 index launch (via PR Newswire): https://www.prnewswire.com/news-releases/tase-launches-a-new-index-for-israels-major-real-estate-companies---ta-real-estate-35-302598320.html

• Azrieli Group, Q2 2026 results (via Investing.com): https://www.investing.com/news/company-news/azrieli-group-q2-2026-slides-strong-operations-major-growth-pipeline-93CH-4867780

• Commercial Observer, Tel Aviv Stock Exchange US commercial real estate issuance, February 2026: https://commercialobserver.com/2026/02/tel-aviv-stock-exchange-us-commercial-real-estate-issuance/

• JLL, Israeli outbound commercial real estate investment 2025 (via Ynetnews): https://www.ynetnews.com/real-estate/article/sj4kfkbfzg

• Globes English, Simad Holdings Chapter 11 filing: https://en.globes.co.il/en/article-simad-holdings-files-for-bankruptcy-in-us-1001545138

• Globes English, shekel at 30 year strongest against dollar: https://en.globes.co.il/en/article-shekel-at-30-year-strongest-against-dollar-1001539854

• Israel Finance Ministry Chief Economist, foreign buyers of Israeli property Q1 2026 (via The Times of Israel): https://www.timesofisrael.com/weakening-dollar-cools-us-demand-for-israeli-property-french-british-buyers-surge/

• Redfin, Home Price Index, July 2026: https://www.redfin.com/news/press-releases/redfin-reports-u-s-home-prices-rose-0-27-in-july-essentially-unchanged-from-a-month-earlier/

• Zillow, Home Value Index, Miami, July 2026: https://www.zillow.com/home-values/12700/miami-fl/

• Zillow, Home Value Index, Miami-Dade County, July 2026: https://www.zillow.com/home-values/398/miami-dade-county-fl/

Educational Rule 506(c) Disclosure

This state market review is educational market commentary prepared for United States accredited investors and is based on public data from the third party sources cited herein. It is not investment, legal, tax, or financial advice, and it is not a recommendation to buy, sell, or hold any security or to pursue any strategy. It is not an offer to sell or a solicitation of an offer to buy any security. Any securities offering by Investo Capital or its affiliates is made only under Rule 506(c) of Regulation D to verified accredited investors through definitive offering documents (including a Private Placement Memorandum), which control in all respects. **Investing in real estate involves substantial risk, including market, financing, liquidity, regulatory, insurance, and physical risks, and may result in the loss of some or all of the capital invested.** Content regarding non-US markets, including Israel, is provided for educational context only and involves additional foreign-market risks, including currency, tax, legal, and geopolitical risks; it is not tax or cross-border legal advice. No return, income, or appreciation is projected, promised, or guaranteed. Past performance and forward looking statements are not guarantees of future results, and forward looking statements are inherently uncertain and may prove incorrect. Figures are drawn from the cited sources, may contain errors or become outdated, and should be independently verified before any decision. *Compliance information, not legal advice.*