If the IPO happens, your cap rate math is about to get a new variable: Wall Street’s profit target. Before 2008, Fannie and Freddie were publicly traded, shareholder-driven — and the unofficial engine of cheap apartment debt. The implied government guarantee kept borrowing costs low, cap rates compressed, and prices climbing. When the crisis hit, they were taken over and placed under FHFA conservatorship. Stability, not profits, became the mission. Now the plan is to flip the switch back. An IPO would put them under Wall Street’s growth demands again. That changes incentives — and incentives change pricing. Second-order effects if multifamily loan spreads widen and the guarantee is reworked, even slightly: Cap rates drift upward as the cost of debt rises. Value-add deals built on aggressive leverage stop penciling. Smaller sponsors, most dependent on agency execution, get squeezed out. More CRE debt flows to banks and private lenders at today’s higher rates. What to watch: How the backstop is structured — implied vs. explicit guarantee. Capital rules FHFA sets for the GSEs post-IPO. Changes to annual multifamily lending caps and mission requirements. Apartments didn’t just get built and traded on rent rolls — they were built on cheap, reliable agency debt. Change that foundation, and the math on every deal changes with it. https://lnkd.in/esKtuQin