Investors, Partners, and Friends,

We hope you’ve been well. In this month’s Rockview Review, we dive into three key developments:

1. Enrique’s Move to Phoenix: A strategic relocation that strengthens Rockview’s position in this new real estate cycle.
2. Trump’s Tariffs: An in-depth look at how the latest trade policies will impact U.S. housing and construction costs.
3. 2025 Sentiment: A sobering return to realism is finally causing transaction velocity to pick up.

We trust you will find these insights valuable, and are always here to answer any questions.

1. Enrique’s Strategic Move to Phoenix

We are excited to share that Enrique Huerta, Co-Founder and Principal of Rockview Capital, has officially re-located to Phoenix, Arizona. This move reinforces our deep commitment to investing in the Southwest and enhances our ability to:

• Strengthen Market Engagement: By being on the ground, Rockview is enhancing its relationships with brokers, owners, managers, and other key stakeholders, improving our deal flow and market intelligence.
• Improve Asset Management: A local presence means more effective oversight of assets as we grow our portfolio.
• Repeat A Proven Strategy to Build Scale: At his prior firm, Enrique executed on this same in-the-market strategy with moves to Phoenix and Denver, which led to his growing a 3,600+ unit portfolio across 25 multifamily assets in 6 states and 13 submarkets across the Western United States.

Pictured: Rockview Capital Principal’s transaction experience across key markets.

A Commitment to Excellence

At Rockview, we are committed to delivering excellent returns for those who trust us with their hard-earned capital. Enrique’s move to Phoenix is more than a new place of residence, it’s a strategic investment in local expertise, further enhancing our ability to capitalize on emerging opportunities as we approach a new real estate cycle in 2025 and beyond.

2. Trump’s Tariffs: Navigating New Trade Policies

President Trump’s recent imposition of tariffs, including a 25% tariff on steel and aluminum, is shaking up U.S. trade policy, with ripple effects on construction costs, supply chains, and capital markets that impact multifamily real estate.

Impact on Homebuilder Stocks

• Cost Increases: “Tariffs could push home construction costs up by 4% - 6% over the next 12 months as material costs adjust to the new landscape. In some cases, tariffs could push prices up by double-digit percentages” (​CoreLogic​).
• Stocks Fall: Stocks for homebuilders – who rely on imports from China, Mexico, and Canada – have already seen notable declines (​Investopedia​).

Pictured: Stock trends for D.R. Horton (red), Lennar Corporation (pink), Toll Brothers (green), and PulteGroup (purple).

A Historical Perspective on Tariff Impact: 2018 Washing Machine Tariffs

To see what happens when tariffs are enacted, we can look back to January 2018 when President Trump imposed safeguard tariffs on washing machine imports.

• Intended to protect domestic manufacturers like Whirlpool, these tariffs added to pre-existing antidumping duties, making them one of the most aggressive U.S. trade interventions.
• While over 2,000 jobs were created, consumers ultimately bore the cost—washing machine prices rose by nearly 12%, costing Americans $1.5 billion annually (​Becker Friedman Institute​).

Pictured: The Effect of Antidumping and Safeguard Tariffs on Washers and Dryers Prices

Key Takeaway: While tariffs may protect select industries, they also create undeniable inflationary pressures that affect the broader economy.

3. Rising Housing Development Costs: What to Expect

With residential and commercial construction heavily dependent on imports, Trump’s latest tariffs will add direct costs pressures on new developments.

Material Cost Increases Expected (Data from ​CoreLogic​)

• Lumber: A 25% tariff on Canadian wood will increase framing and plywood costs, adding $5,000–$10,000 per new home.
• Steel & Aluminum: Prices for structural steel are expected to rise by 12-20%, significantly impacting high-rise and multifamily developments.
• Cement & Concrete: With 25% of U.S. cement imports coming from Canada and Mexico, prices could climb 8-12%, affecting nearly all construction types.
• Fixtures & Appliances: Key interior components—including cabinetry, lighting, and kitchen appliances—could see 10-20% increases, making value-add renovations more costly.

Pictured: Anticipated Material Inflation Due to Tariffs

Tariffs Will Drive Up Home Prices, Boosting Rental Demand

Tariffs are expected to increase construction costs by as much as $20,000 per home (​CoreLogic​),  further straining affordability for potential homebuyers who will face higher mortgage requirements and greater down payments. This will lead more consumers to turn to renting, bolstering demand for rental housing and reinforcing the appeal of multifamily assets.

4. Multifamily in 2025: Tariffs Impacts, Market Realism

Why Tariffs Will Make Existing Assets More Valuable

New developments are already hard to pencil due to high interest rates, subdued rent growth, and tight construction financing. With tariffs adding further cost pressures, supply growth will slow even more, making existing multifamily assets even more attractive.

• Increased Value Insulation to Replacement Cost: Since construction costs will rise, existing assets will be further insulated from new supply due to a higher discount to replacement cost.
• Decreased New Supply, Leading to Rent Growth: Once the current supply wave burns off, limited new deliveries in high-growth markets will drive rent increases and stronger asset performance.

Realism About Rates is Finally Bringing About Transaction Activity

Our biggest takeaway from the National Multi Housing Conference (NMHC) in January is that unrealistic market optimism over lower future interest rates has shifted to realism and acceptance, which is driving market stabilization and increased deal flow.

1. Lenders Are More Open to Resolving Distressed Assets:

• In direct conversations with bridge lenders, we heard a notable shift in tone—groups that were previously unwilling to foreclose on overleveraged borrowers now acknowledge that it’s time to take action.
• Several lenders told us they are actively exploring note sales and REO transactions for the first time, a strong indicator that more distressed opportunities will emerge in the coming months.

2. Higher Deal Volume Observed:

• Since NMHC, we’ve seen a tangible increase in both on- and off-market deal flow with properties priced at much better valuations, and we expect this to translate into actionable investment opportunities very soon.

Final Thoughts: A Promising Future for Multifamily

After a prolonged period of uncertainty, 2025 is shaping up to be an active year for multifamily transactions, with investors increasingly confident in the sector’s resilience, inflation protection, and long-term growth prospects. As tariffs reshape global trade and capital markets, multifamily real estate remains one of the best-positioned asset classes for long-term stability and inflation protection. With the next cycle beginning, we look forward to navigating these opportunities with you and will continue delivering market insights as the landscape evolves.

Until next time,

Rockview Capital, LLC

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