Top 10 insights from the Land & Homebuilding Capital Markets Forum

The Land & Homebuilding Capital Markets Forum brought together top industry professionals to explore the latest trends and challenges shaping real estate investment and development in 2026. As a sponsoring company, George Smith Partners attended the event and compiled this article to share key takeaways. From shifting land strategies to disciplined capital management, these insights provide a clear picture of the market’s evolving priorities.

High level takeaways from the Land & Homebuilding Capital Markets Forum

• Capital is available, but only for clean deals with real downside protection
• Land strategies are shifting toward flexibility over hoarding
• Builders are prioritizing cash flow and balance sheets, not volume
• Equity is cautious; preferred and structured capital are filling gaps
• Submarket fundamentals matter more than ever — the Sunbelt isn’t uniform
• Quiet consolidation is starting to show up
• In this cycle, relationships close deals faster than spreadsheets

Bottom line:
2026 is about discipline, liquidity, and being ready when the window opens.

The top 10 insights...

1.Capital is available — but only for clean deals with real downside protection

Liquidity is back in the market across debt and structured equity, but it is highly selective. Capital providers are prioritizing clarity, credibility, and protectability over growth stories or upside narratives. Deals with messy entitlement paths, unclear budgets, complicated capital stacks, or thin margins of safety are getting passed over early.

What this means in practice:

• Lenders are stress-testing downside more aggressively (cost overruns, absorption slowdowns, exit risk).
• Equity is underwriting “what could go wrong” before “what could go right.”
• Sponsors who can present clean structures, conservative bases, and transparent risk mitigation are winning mandates and closing faster.

Bottom line:

Liquidity alone does not win deals — structure, execution, and downside protection do.

2.Entry basis now matters more than growth assumptions

Across asset classes, investors are prioritizing below-replacement-cost acquisitions and disciplined basis over pro forma rent growth or market appreciation. With new development still constrained and expensive, the best returns are coming from buying right rather than betting on the future.

This is a meaningful shift from prior cycles:

• Returns are being driven by purchase price rather than underwriting heroics.
• Capital is gravitating toward supply-constrained, business-friendly markets where replacement cost is a meaningful floor.
• Downside protection is being underwritten first; upside is treated as a bonus.

Bottom line:
Entry price is the primary driver of returns — not growth assumptions.

3.Land strategies have shifted from hoarding to flexibility

Builders are moving away from balance-sheet land hoarding and toward optionality. Instead of stockpiling lots, they are increasingly using options, land banking, phased takedowns, and JV structures to preserve control while reducing capital intensity.

Why this matters:

• It improves liquidity and reduces interest carry risk.
• It allows builders to stay active in good markets without overcommitting capital.
• It creates alignment with land bankers and institutional partners who prefer staged exposure.

Bottom line:

Flexibility beats accumulation in an uncertain market.

4.Builders are optimizing for cash flow and balance sheets — not volume

The “growth-at-all-costs” mindset is gone. Builders are now prioritizing liquidity, capital efficiency, and risk-adjusted returns over unit counts and top-line production.

This is showing up in several ways:

• More conservative starts.
• Greater reliance on land banking and structured capital.
• More focus on return on equity (ROE) and return on invested capital (ROIC) rather than market share.

Bottom line:

Capital discipline has replaced volume as the measure of success.

5.Structured capital is replacing traditional equity in many deals

Traditional 90/10 JV equity structures are giving way to preferred equity, mezzanine, profit participation, GP stakes, and structured credit. The line between debt and equity continues to blur as investors seek equity-like returns with debt-like protection.

Why this is important:

• Common equity is more cautious and price-sensitive.
• Structured capital is filling valuation and return gaps that traditional equity won’t bridge.
• Sponsors who can creatively structure capital are closing deals others cannot.

Bottom line:

Flexible capital solutions are increasingly the difference between closing and not closing.

6.Land banking has matured into a true institutional asset class

Land banking is no longer niche — it is now a recognized institutional investment strategy supported by insurance companies, pensions, and large private funds.

This has several implications:

• More scalable and durable capital in the space.
• Better standardized documentation and underwriting.
• More professionalized monitoring, reporting, and governance.

At the same time, land bankers are using leverage at the fund level, typically from regional banks or non-bank lenders, treating their platforms like portfolio businesses rather than one-off deals.

Bottom line:

Land banking is here to stay as a core financing tool.

7.Diligence, utilities, and entitlements are the biggest deal risks

Across all panels, the most consistent risk drivers were:

• Changing utility approvals midstream
• Municipal/entitlement friction
• Vertical market risk (pricing, absorption, incentives)
• Product mismatch (building the wrong product for the submarket)

Late surprises — undisclosed pump stations, infrastructure requirements, or permitting issues — are still one of the most common reasons deals retrade or fall apart.

Bottom line:

Early, thorough diligence materially improves closing certainty.

8.Relationships matter as much as models

In a tighter, more selective market, trust, track record, and communication often determine whether a deal gets done as much as — or more than — the spreadsheet.

This is especially true in land and development, where partnerships often last 8–50+ months. Capital providers are placing significant weight on sponsor credibility, transparency, and execution history.

Strong communication — regular updates, clear reporting, drone imagery, and honest problem-solving — is now a prerequisite for institutional capital.

Bottom line:

Relationships close deals faster than spreadsheets.

9.Demand is mixed, highly submarket-specific — and affordability still rules

The “Sunbelt boom” is no longer uniform. Performance varies dramatically by submarket based on:

• Local supply pipeline
• Job growth and wages
• Regulatory environment
• Property taxes and insurance costs
• Availability of entry-level housing

At the same time, affordability remains the central constraint:

• Mortgage rates are still elevated versus the 2010s.
• Buyer concessions have become structural rather than temporary.
• Rising homeowners insurance costs are further squeezing purchasing power.

As a result, opportunity is migrating outward from high-cost coastal markets into exurban and outer-suburban rings where payments still pencil.

Bottom line:

Granular submarket analysis matters more than ever.

10.Quiet consolidation is underway — and 2026 Is about discipline, liquidity, and timing

While not yet headline-grabbing, consolidation among regional builders, developers, and land operators is beginning to show up. Stronger balance sheets are gaining share, while weaker players are retreating or being absorbed.

Stepping back, 2026 is not a “swing for the fences” year — it is a year defined by:

• Disciplined underwriting
• Strong liquidity management
• Creative capital structuring
• Relationship-driven execution
• Being ready when the window opens

Bottom line:

Clean deals win. Flexible land strategies beat hoarding. Strong balance sheets beat volume. And relationships matter as much as models.