TPG Mortgage Trust Cites Strong 2025 Performance

- The Chicago multifamily market remains strong, with a low vacancy rate of 4.7% and a 12-month rent growth of 3.8% midway through 2025. Average capitalization rates in the Chicago metro area were around 6.2%, with properties trading at an average of $221,000 per unit in the third quarter of 2025. - Mortgage REITs (mREITs), like TPG Mortgage Trust, significantly outperformed equity REITs in 2025, delivering a total return of 16.02% and an average dividend yield of 12.24%. This compares to a 2.3% total return and a 4.07% dividend yield for equity REITs. - For those transitioning into real estate investment careers in Chicago, firms are seeking candidates with a bachelor's degree in finance or a related field and 1-3 years of experience. Key skills include financial modeling (IRR, MOIC), proficiency in Excel and Argus, and strong analytical abilities. - New construction of multifamily units in Chicago has slowed significantly, with only 4,131 units underway at the end of 2025, well below the ten-year average of 6,380. This supply constraint is expected to drive further rent growth, with a forecasted increase of 3% in 2026. - Aspiring real estate investors can start with limited capital through strategies like "house hacking" with an FHA loan (requiring as little as a 3.5% down payment) or investing in publicly traded REITs with a few hundred dollars. Other methods to raise capital include utilizing private money lenders and forming partnerships or syndications. - To build a network in the Chicago real estate scene, individuals can join local organizations like the Chicago Area Real Estate Investors Association (CAREIA) or attend networking events such as those hosted by the Chicagoland Real Estate Investors Network. These groups cater to everyone from new to seasoned investors. - A key tax strategy for real estate investors is the 1031 exchange, which allows for the deferral of capital gains taxes when selling an investment property and purchasing a "like-kind" property. Additionally, depreciation, including accelerated methods, offers significant tax deductions by accounting for the wear and tear on a property over time. - Neighborhoods on Chicago's South East side are a focus for community-based real estate investment, with organizations like the South East Chicago Real Estate Club providing resources, networking, and vendor connections for investors looking to redevelop properties in the area.