As the real estate market continues to evolve, many of you have asked how recent tariffs might influence our business and your investments with Provision Capital. We want to share our perspective and reassure you of our positioning.
New tariffs on construction materials such as steel, aluminum, and lumber are expected to raise the cost of new construction. According to the April 2025 NAHB/Wells Fargo Housing Market Index, builders estimate an average increase of $10,900 per new home. While this has sparked broad industry conversation, it is important to understand how it fits into our strategy.
At Provision Capital, our core focus is on redeveloping existing housing stock, not on ground-up construction. That significantly limits our exposure to the rising material costs tied to new builds. By working primarily with existing structures, we avoid much of the direct impact of these tariffs.
That said, we remain mindful of the broader economic effects tariffs can have, such as inflationary pressure, interest rate shifts, and changes in consumer sentiment, which may affect housing affordability or rental demand over time.
We continue to monitor these dynamics closely. Our conservative investment philosophy and focus on sustainable redevelopment give us the agility to respond thoughtfully to changing conditions.
We remain confident in our approach and committed to delivering strong, risk-adjusted returns. Thank you for your continued trust and partnership. As always, if you have any questions or would like to discuss further, we are here for you.
