Announcement

Most growth — whether in nature, business, or human performance — follows a similar pattern: long-term progress shaped by short-term adjustments. What appears smooth from afar is built through steps, recalibration, and resilience.

At Lafayette, 2025 was no exception to this principle. Across market fundamentals, our investment strategy, and our operating capabilities, we faced challenges, adapted, captured opportunities, and ended the year stronger and better positioned for the future.

Market Fundamentals

From a market perspective, after several years of exceptionally favorable fundamentals, we began to see moderation. We maintained healthy occupancy levels in the mid-90s range, but it required effort and rent growth slowed to virtually flat by year-end, lease-ups required more concessions, and certain previously high-growth pockets in FL and TX experienced localized oversupply. On the positive front, rent collections were as strong as ever.

In this environment, operational discipline matters. We focused on driving cost efficiencies mostly through internalization, achieving just 1% year-over-year same-store expense growth, below inflation, and maintaining strong resident satisfaction with renewal rates at close to 70% on average.

Importantly, today’s softer conditions are also laying the groundwork for tomorrow’s strength. Much of the current supply pressure stems from projects launched during the ultra-low interest rate period between 2020 and mid-2022. In contrast, rental housing starts have slowed dramatically over the past two years in response to higher rates. That slowdown is expected to reduce new deliveries going forward, and increasingly so by 2027 — precisely when a significant portion of our current development pipeline is scheduled to come online.

Our ability to pivot between acquisitions and development, secure land when others paused, and deliver homes efficiently through our in-house homebuilding platform positions us to enter the next phase of the cycle with a strong competitive advantage.

Vertically Integrated Operating Entities

Marquis continued to scale in 2025, starting 152 homes and delivering 50. The team grew from 9 to 16 employees, and we now have a portfolio of 10 home designs and 2 general contractor licenses that support our growing pipeline.

Marquis now has an established track record, not only by building for Lafayette but also for third-party clients. Earning the trust of respected industry peers as a fee builder is strong validation of Marquis’s product quality, execution, and leadership. These partnerships help us scale faster.

In 2026, we are targeting approximately 350 starts and remain focused on maintaining quality and execution as we continue to grow.

Brandywine also expanded meaningfully, with close to 5,000 homes under management today across 13 markets, of which 500 are on behalf of third-party clients, and is supported by a team of 74 professionals. We are particularly proud that our operating platforms are increasingly recognized as trusted service providers by leading third-party institutional owners.

A special congrats to Brandywine for winning “Atlanta’s Best Property Management Company”; we are so grateful for the positive impact you have on our residents and communities.

Our ability to pivot between acquisitions and development, secure land when others paused, and deliver homes efficiently through our in-house homebuilding platform positions us to enter the next phase of the cycle with a strong competitive advantage.

Lafayette continued to strengthen its operating infrastructure in 2025. Across our investment strategies, we underwrote over 1,000 opportunities through disciplined, repeatable processes. We also enhanced our reporting / finance infrastructure, enabling faster and granular data visibility across the platform. Our asset management team implemented quarterly strategic reviews, working with Brandywine on stabilized assets and with Marquis on development projects. As we enter 2026, I am proud of the first-class team we have in place and the platform we have built to deliver.

Capital

The fundraising environment across commercial real estate remained measured, with many investors cautiously re-engaging rather than deploying at full pace. Yet, consistent with our broader theme, steady progress was made through a series of smaller steps.

Our institutional joint venture partners renewed capital commitments to our existing strategies, enabling us to allocate ~$150 million of capital in 2025, mostly toward BTR projects.

Regulation

Regulation has taken center stage in our industry in 2026. In January, the White House issued an executive order aimed at limiting investors’ ability to purchase single-family homes that might otherwise be purchased by families.

While it remains unclear how the executive branch’s directives will translate into legislative or regulatory implementation, it is likely that acquiring existing homes through resale channels will face more headwinds. This has represented a small portion of our activity in recent years, as retail buyers outbid investors in today’s market.

BTR was explicitly and thoughtfully carved out of the executive order, and has been distinguished in various state-level policy discussions as well. This suggests policymakers recognize that expanding new housing supply is critical to improving affordability, and that limiting new development would counter that objective. That said, we remain cautious and continue to closely monitor legislative developments as the final policy framework remains uncertain.

Our vertically integrated platform – with in-house capabilities spanning land acquisition, entitlement, development and construction – positions us well within this shifting landscape.

While policy evolution can introduce periods of uncertainty, it is a natural part of a maturing asset class. We believe operators focused on delivering new, high-quality housing supply remain well-positioned to play an important role in addressing the nation’s housing needs.

Concluding Remarks

In 2026, Lafayette will celebrate its 15th anniversary. Reflecting on that journey, the long-term perspective feels especially meaningful. Day to day, progress often feels incremental, shaped by countless decisions, challenges, and lessons along the way. Yet with the benefit of distance, the cumulative effect becomes clearer.

From that 30,000-foot view, what stands out most is not any single milestone, but the steady evolution of our platform, the growth and dedication of our team — now 120 colleagues across our three operating entities — and the trust our partners and investors have placed in us over time.

We are deeply grateful to everyone who has been part of this journey. The past 15 years have been a continuous process of learning and building, and we look forward to carrying that same long-term mindset into the future.

Thibault Adrien
Founder & CEO, Lafayette Real Estate