Hello Brick Brief readers, 

Happy Monday. In recent news, RealPage expects apartment rent growth to rebound in 2026, U.S. office leasing is recovering in Q3, and Hines sees U.S. manufacturing reshoring and e-commerce as key industrial tailwinds.

We are also likely approaching the end of the longest government shutdown in U.S. history.

🏙️ RealPage Sees Rent Rebound Ahead
RealPage expects rent growth to return in 2026 as apartment completions slow after two years of record supply. The firm projects Miami, Seattle, and Fort Lauderdale to lead gains as easing construction and steady job growth tighten vacancies and restore landlord pricing power.

🏢 Office Leasing Finds Its Floor
U.S. office leasing is recovering as quarterly volumes near 100 million square feet and vacancy rates begin to decline. Tenants are still downsizing, but smaller users and steady Class A demand are helping absorption stabilize while new construction remains limited.

🏭 Re-shoring Fuels Industrial Expansion
Hines projects a $1 trillion U.S. manufacturing boom by 2030 that could lift warehouse demand 35% and add 1.3 billion square feet of supply. E-commerce now surpasses 10% of retail sales, intensifying competition for last-mile logistics space near major population centers.

30Y Mortgage: 6.32% (+3 bps)

10Y Treasury Yield: 4.13% (+4 bps) 

WSJ Prime Rate: 7.25%

FTSE NAREIT Index: 769.35 (+1.56%) 

30-day SOFR Average: 4.18%

U.S. consumer sentiment falls to a three and a half year low – The University of Michigan index dropped to 50.3 as the prolonged government shutdown fueled economic anxiety and benefit cuts, while five-year inflation expectations eased to 3.6% (Reuters)

US shutdown nears resolution after 40 days – Senate Democrats backed a deal to reopen key agencies through Jan. 30, restoring pay for 600K furloughed workers as the $18B economic hit and data blackout strain growth (Bloomberg)

NY Fed survey shows easing inflation expectations but rising job concerns – Households see 3.2% inflation next year and greater difficulty finding work (Reuters)

Fed survey of banks, asset managers, and hedge funds flags policy uncertainty and AI as rising stability risks – 61% of respondents cited policy and geopolitical risk as top concerns, while 30% warned AI-driven market sentiment could trigger shocks in the next 12–18 months; commercial real estate showed early signs of stabilizing (Reuters)

Fed Vice Chair Jefferson backs slower pace of rate cuts – He said policy is nearing a neutral level and cautioned that limited government data from the shutdown makes a gradual approach prudent (Reuters)

CRE sentiment stabilizes in Q4 – Real Estate Roundtable’s index held at 67 as executives cite easing rate pressures and rising deal activity despite tariff and policy uncertainty (ConnectCRE)

Starwood may leave NYC over Mamdani policies – Barry Sternlicht warned rent freezes and union mandates could stall housing growth and hurt business confidence (Bisnow)

77% of metros saw Q3 price gains – Median existing single-family hit $426,800 (+1.7% YoY) as the Northeast rose 6% and the West fell 0.1%, with the typical payment down 2.8% QoQ to $2,187 but still up 2.1% YoY (GlobeSt)

Home prices fall 0.3% QoQ, rise 2.1% YoY in October – Clear Capital’s Home Data Index showed Midwest and Northeast markets leading gains while the West and South declined (ClearCapital)

Insight: Home prices declined 0.3% in Clear Capital’s October 2025 Home Data Index, its first national quarterly decrease this year. The index compares the most recent four months of transactions with the previous three to identify shifts in pricing momentum. The Midwest and Northeast posted small gains, while the South and West saw notable weakness led by Tampa (-2.7%), Jacksonville (-2.8%), and Denver (-2.5%).

Building on our mortgage buydown discussion on Friday, national homebuilders concentrated in the Sunbelt now face the same pressure driving recent price declines. Markets that once relied on buydowns to sustain demand are seeing sales stall even with offers as low as 1%. Builders favor these temporary rate reductions instead of cutting list prices because buydowns lower monthly payments while keeping headline prices unchanged. The approach protects comparable sales, supports appraised values, and helps preserve the appearance of pricing stability in markets that have become overbuilt relative to current demand.

Zillow forecasts continued slowdown in CPI shelter inflation – Owners’ Equivalent Rent is projected to rise 0.22% in October and end 2025 up 3.6% YoY, while rent of primary residence is expected to climb 3.0% before easing further in 2026 (Zillow)

Lower mortgage rates fail to boost affordability – Buyers remain priced out as homeowners stay put in some regions, keeping inventory tight while rising insurance and property taxes add further pressure (WSJ)

SFR operators extend lease terms as market matures – Average lease lengths near 13 months as renters seek stability and landlords prioritize retention over turnover amid moderating 1.4% national rent growth (CommercialObserver)

National average apartment rent fell 0.3% to $1,708 in October, the steepest drop in over 15 years – Elevated supply drove widespread declines, led by Denver (-1.3%), as annual rent growth slowed to 0.8% (CoStar)

U.S. apartment rents to rise 2.3% in 2026 – RealPage projects growth led by Miami (+3.8%), Seattle (+3.7%), and Fort Lauderdale (+3.5%) following a 0.7% annual decline through October 2025 (RealPage)

Insight: RealPage expects rent gains in 2026 to stem from a slowdown in new apartment completions after two years of record deliveries. Supply pressures that drove steep rent cuts in 2025 are expected to ease, allowing occupancy to stabilize and pricing power to return in high-demand metros. Markets like Miami, Seattle, and Fort Lauderdale are projected to lead growth as strong job creation and limited future supply give landlords more room to raise rents.

U.S. office leasing hits ~100M sf in Q3 – Deal counts near pre-pandemic levels while average lease size is 15%–20% smaller as large tenants right-size, small users drive demand, and new supply remains scarce (GlobeSt)

Office recovery widens as new supply stalls – Q3 reports show vacancy rates declining and Class A assets leading demand, while construction slows and older buildings face conversions amid cautious job growth (ConnectCRE)

Austin, TX office leasing slows amid tech pullback – Vacancy climbed to 27.2% as startup job losses and limited AI leasing left major projects like the Republic and Sixth and Guadalupe struggling to fill space (CommercialObserver)

Hines projects $1T re-shoring boom by 2030 – Rising U.S. manufacturing investment could boost warehouse demand 35% and add 1.3B SF of industrial supply (Hines)

U.S. warehouse rents are climbing as e-commerce tops 10% of retail sales – Operators are competing for last-mile infill sites near major population centers, tightening supply and driving rents higher (Hines)

Insight: As we’ve recently discussed, Ares and Makarora are acquiring Plymouth Industrial REIT for $2.1B, which owns more than 200 warehouses across the Midwest and East Coast that serve distribution corridors within a day’s drive of 70% of the U.S. population. Their investment targets the growing importance of last-mile logistics as operators compete for infill sites near major population centers. Plymouth’s portfolio sits in prime position to capture rent growth and rising demand across regional distribution networks thanks to the massive e-commerce tailwind.

Retailers expect U.S. container imports to keep falling in 2026 – Imports dropped 7.4% YoY in September as retailers front-loaded shipments in 2025 to avoid tariffs, leaving stores stocked and reducing demand for new orders (FreightWaves)

PNC boosts branch investment plan to $2B – The bank will open 300 new branches over five years and hire 2,000 staff by 2030 as it targets 7% market share across major U.S. metros (Bloomberg)

McDonald’s and Chili’s gain diners seeking value – Consumers are trading down as fast-casual chains like Chipotle, Cava, and Sweetgreen lose younger customers (Reuters)

Meta to invest $600B in U.S. AI infrastructure over three years – The spending plan includes massive data center expansion as Zuckerberg accelerates Meta’s push toward AI superintelligence (Reuters)

At this point, these capex numbers are starting to look a bit unrealistic. How is Meta going to finance this?

Deutsche Bank was recently exploring hedges for its data center loan exposure after lending billions to AI infrastructure developers.

Google to launch first orbiting data center by 2027 – Project Suncatcher will deploy 81 AI-powered satellites using continuous solar energy, marking Big Tech’s entry into space-based computing alongside SpaceX and Amazon (Bisnow)

Hotel sector weakens as travel slows – RevPAR is flat nationally as midtier chains face falling government and international demand, mounting debt maturities, and reduced air traffic during the 40-day shutdown (Bisnow)

U.S. hotel RevPAR fell 2.3% for week of Oct. 26–Nov. 1 – Halloween weakened weekend demand as October marked a seventh straight monthly decline (STR)

Twenty banks provide $18B loan for Oracle-linked data center in New Mexico – Sumitomo Mitsui, BNP Paribas, Goldman Sachs, and MUFG led financing for the Stargate AI campus backed by Oracle, SoftBank, and OpenAI (Reuters)

Flagstar Bank sells $247M multifamily loan portfolio tied to Steve Croman to Bellwether Asset Management – The 38-loan sale covers 49 Manhattan properties and reduces Flagstar’s rent-stabilized exposure (TheRealDeal)

Morgan Stanley and Société Générale provide $147M refinancing for 255 Greenwich office tower in New York, NY – Jack Resnick & Sons secured 10-year CMBS debt arranged by Avison Young for the 600K-SF Lower Manhattan property (CommercialObserver)

West Shore acquires Palm Beach Gardens Apartments in Palm Beach Gardens, FL for $118M from Advenir – Citi provided a $153M acquisition loan for the 542-unit, 21-acre multifamily community (CommercialObserver)

Stephen Ross’ Related Ross acquires The Ben hotel in West Palm Beach, FL for about $190M from Wheelock Street Capital – The 208-room Marriott Autograph Collection property features a rooftop venue overlooking Palm Beach Island (Bloomberg)

JPM REIT acquires retail center The Shoppes at Heron Lakes in Coral Springs, FL for $54M – The 145K-SF, fully leased property includes tenants such as CVS, McDonald’s, and Crunch Fitness (CommercialObserver)

Amazon pays record $700M for Virginia data center site – The tech giant bought 70% of the 270-acre Devlin Technology Park from Stanley Martin Homes for $3.7M per acre, the largest land deal in state history (Bisnow)

Archer Aviation acquires Hawthorne Municipal Airport in Los Angeles, CA for $126M – The electric vertical takeoff and landing (eVTOL) air taxi firm will use the 80-acre airport as its L.A. operations hub and AI-powered aviation test site (CommercialObserver)

AI insurer Stand expands into climate-risk markets – The San Francisco startup uses physics-based models to cover luxury homes in wildfire-prone California and hurricane-exposed Florida (Realtor.com)