TLDR: 2026 predictions update, optimistic underwriting, and growing the team!
We are already halfway through 2026, so let’s see how Tack’s 2026 predictions are trending – one definite yes, one definite no, and most others trending correctly.
Gold has been the biggest surprise, falling ~22% since February. Increasing expectations for rate hikes may be contributing to the decline. Increasing treasury yields may also jeopardize the multifamily transaction volume prediction as increased yields make financing real estate acquisitions more challenging.
Unfortunately, we will not be getting a USA vs. England match on July 4th.
Trying to make predictions like these is always a good reminder to not base investment decisions and underwriting around macro-economic changes that are difficult to predict (see more on that below).
Any investment can look attractive if assumptions are sufficiently optimistic.
Tack recently reviewed a multifamily offering that projects a 3.75x return over five years. Tack has never found a deal worthy of underwriting returns this high.
However, the assumptions include ~2% cap rate compression (7.47% entry to 5.50% exit). This assumption alone results in a ~36% increase in property value even if the property’s net operating income was unchanged.
Just holding this at 7.47% (where the property is valued today) drops the return to ~1.7x, a 56% haircut.
In addition, the worst-case scenario presented in the presentation still assumes ~1.5% cap rate compression (7.47% entry to 6.00% exit). This is still a ~25% increase in property value based on an uncontrollable assumption.
Cap rate compression can be reasonable for the right asset, market, or business plan. However, assuming a 5.5% exit cap rate for a 1969-vintage property effectively implies a return to 2020-2021 ZIRP-era pricing.
That could be correct but is highly unlikely and highly optimistic. At a minimum, the sensitivity tables should extend to 7.5% – 8.0% (where the property is valued today) so prospective investors can make their own determination.
Zach Harrison joined the team in June as Tack Capital’s first full-time employee. He is joining the team as an Acquisitions / Asset Management Associate.
A Richmond native, Zach joins Tack from Building Equity Management, a Manhattan-based operator of ~150 properties. He spent two years there focused on multifamily asset management.
Zach is an active real estate investor himself, owning and managing a duplex in Richmond, VA.
Welcome Zach!
