The headlines didn’t spell out “real estate,” but for operators like us, the implications are crystal clear.
We’re talking about construction-related goods like steel, aluminum, electrical components, plumbing supplies, appliances, and flooring, many of which are sourced internationally or heavily impacted by global pricing. Even modest value-add renovations can start feeling more expensive when tariffs come into play.
And yet…no one really knows how long these tariffs will stick. They could deepen, disappear, or stall in negotiations. That’s the nature of today’s environment: policy can shift on a dime, and the market reacts before the ink is even dry.
So what do you do?
If you’re like us at Blue Lake Capital, you don’t try to predict the storm. You focus on keeping the ship steady.
We don’t ignore volatility, but we don’t build around it either.
We're not pretending this round of tariffs doesn’t matter. It does. But it doesn't change the fundamental drivers of multifamily: steady demand, cash flow, and value tied to real assets. People still need a place to live, especially in the middle-to higher income housing space we focus on. Well-maintained, well-operated properties in strong markets are still performing, and they will continue to.
Volatility is a reminder to tighten your strategy, not abandon it. Here’s how we’re doing it:
- We’re sourcing smarter and sooner.
We’ve been working with our vendors for months to mitigate supply chain risk. That includes early procurement, sourcing from domestic manufacturers when possible, and building flexibility into renovation plans so we’re not dependent on any single supplier or product. These are the kinds of quiet adjustments that help maintain momentum when the external landscape shifts.
- We’re emphasizing operational efficiency.
We’ve always believed in smart, targeted CapEx. Our renovations aren’t designed to win design awards; they’re designed to boost NOI and improve tenant retention. Every upgrade we make is connected to cash flow. That kind of discipline serves us especially well now, as cost pressure builds across the industry.
- We’re open to strategic shifts.
We’re not walking away from value-add, but we’re not blindly tied to it either. In some cases, core or core-plus acquisitions, assets that don’t require extensive renovations, offer a better risk-reward profile in the current climate. Our approach is responsive by design: different market conditions call for different plays.
