The Brick Breakdown

Hello Brick Brief readers, 

Thank you for your continued support! Today we’re seeing new trade deals, a weakening labor market after revised job figures, and a possible return of 100% bonus depreciation. 

🇻🇳 Trade shifts highlight diverging labor and economic paths.
The U.S. imposed a 20% tariff on Vietnamese goods while Vietnam eliminated all duties on American imports, bringing greater clarity to future trade relations. At the same time, the U.S. labor market is weakening, with private payrolls declining in June and revised figures showing overstated job growth, increasing the likelihood of rate cuts.

🏗️ Trump’s tax bill could revive investor appetite for CRE.
The proposed restoration of 100% bonus depreciation would let investors fully deduct property costs upfront, improving returns on development and acquisition. This change could offset pressure from elevated interest rates and rising construction expenses.

🏡 Lower mortgage rates offer a window if supply keeps up.
Refinance applications rose 6.5% as rates fell to April levels, but purchase activity remains sluggish due to affordability challenges. California’s new law removing environmental reviews for most urban projects may speed up housing construction in supply-constrained markets.

This Week in Real Estate: Key Events & Data

Quick Markets

30Y Mortgage: 6.73% (+6 bps) 

10Y Treasury Yield: 4.26% (+2 bps)

WSJ Prime Rate: 7.50%

FTSE NAREIT Index: 770.49 (+0.28%) 

30-day SOFR Average: 4.33%

Market Pulse

​​Trade clarity and weakening job growth reduce economic uncertainty and strengthen the case for rate cuts

U.S. sets 20% tariff on Vietnamese goods while India talks advance – Vietnam drops all duties on U.S. imports, while India resists farm concessions ahead of July 9 deadline (Bloomberg & Reuters)

Job growth overstated as labor market stagnates – Revisions show slower hiring and weak small business gains, with immigration curbs and aging workforce limiting future expansion (WSJ)

Private payrolls fall 33,000 in June – First drop in over two years as small firms pull back hiring, though layoffs remain historically low (Reuters)

Brick by Brick: Blackstone’s QTS Secures $1.5B Refi for Hyperscale Data Centers

 QTS Realty Trust, the data center platform owned by Blackstone, secured a $1.5B refinancing package for fully leased hyperscale facilities in Atlanta and Richmond, two of the fastest-growing data center hubs in the country. The seven-year floating-rate loan was originated by seven major banks and is expected to be securitized as a CMBS deal.

• The loan refinances $1.3B in debt tied to 138 MW across nearly 1M SF of single-tenant space and returns $151.5M in equity to QTS in a cash-out refinancing
• Tenants, described as investment-grade and likely Big Tech firms, are locked into long-term leases with extension options that stretch terms to 11.2 years in Atlanta and nearly 30 years in Richmond
• Atlanta has become the second-largest data center market behind Northern Virginia, with over 60% of its 2.2 GW pipeline already preleased
• Richmond is gaining ground due to its location near trans-Atlantic cable landing points and increased investment from major hyperscalers like Amazon and Meta
• Since acquiring QTS for $10B in 2021, Blackstone has expanded its data center footprint eightfold and now controls $70B in assets with another $100B in development

Takeaway: The refinancing reflects strong lender confidence in QTS’s facilities, which are fully leased to creditworthy hyperscalers under long-term agreements. Blackstone is unlocking capital while holding stable, high-quality assets in supply-constrained markets that are core to the digital economy.

Policy & Industry Shifts

California’s new law removing environmental reviews for most urban projects clears a major obstacle to housing construction.

The Senate’s proposed restoration of 100 percent bonus depreciation would let investors fully expense property costs, encouraging more CRE investment.

Trump tax bill restores 100% bonus depreciation for CRE – Senate version makes provision permanent, boosting investor incentives amid rising costs and rate pressures (CommercialObserver)

California eases housing barriers – New law exempts most urban projects from environmental review, reversing a major hurdle for developers amid severe housing shortage (WSJ)

Massachusetts to ban tenant-paid broker fees – New law shifts cost to landlords, aiming to ease upfront burdens as average rents hit $2,550 (Bloomberg)

Compass exits national MLS rules – The brokerage will no longer comply with NAR’s Clear Cooperation Policy, citing legal risk and advocating for local flexibility (TheRealDeal)

Residential

Mortgage rates have fallen to their lowest levels since April, boosting refinance activity but leaving purchase demand largely unchanged

Mortgage rates dip to April levels – Rates remain stuck in 6–7% range as weak jobs data offsets tariff inflation risks, with Zillow forecasting a 1.4% home value drop in 2025 (Zillow)

Refinance applications jump 6.5% – Lowest mortgage rates since April spark surge, though purchase demand remains weak (Bloomberg)

Pet-friendly rentals lease 8 days faster – 58% of renters now have pets, driving higher engagement and faster leasing across major markets (Zillow)

Inventory doubles in 22 of top 50 U.S. housing markets – Southern and West Coast metros lead surge as new construction outpaces tepid buyer demand (Inman)

Regional

Manhattan home sales jump 17% in Q2 – Cash deals hit record 69% share as wealthy buyers drive luxury surge despite tariff uncertainty (Bloomberg)

Office

U.S. office fundamentals remain mixed as national vacancy hits a record 20.6 percent, with strength in markets like NYC and law firm demand driving D.C. leasing despite federal cutbacks

National U.S. office vacancy hits record 20.6% – Moody’s warns of persistent weakness as return-to-office mandates fail to curb rising vacancies and federal lease cuts loom (Bisnow)

L.A. office leasing tops 3.7M SF in Q2 – Availability climbs to 28.1% as weak media and tech demand offsets gains from financial and trophy space tenants (CommercialObserver)

D.C. leasing hits 1.8M SF in Q2 – Law firms drove 80% of activity as trophy office demand offset federal downsizing; DOJ’s 403K SF renewal led deals despite 30% cutback (CommercialObserver)

Leasing

Invesco renews 200K SF at NYC’s Brookfield Place – Investment firm extends lease at 225 Liberty Street, a 2.5M SF tower owned by Brookfield Properties (CommercialObserver)

Paul, Weiss adds 84K SF at NYC’s 1345 Sixth Ave, expands to 850K SF – Law firm grows Midtown footprint in Fisher Brothers-owned tower with Q2 sublease (CommercialObserver)

Sumitomo Mitsui expands by 50K SF at 277 Park in NYC – Bank grows total footprint to 316K SF at Stahl Organization’s Midtown tower (CommercialObserver)

Defense firm Hatalom signs 42K SF lease in Orlando, FL – The simulation and training provider leased space at Challenger Tech Center, marking one of the city’s largest office deals this year (CoStar)

Industrial

Northeast Class A industrial lease-up slows to 9.3 months – Time on market has risen steadily since late 2022 as demand dynamics shift across the region (CBRE)

Trans-Pacific container rates plunge 39% since June 1 – U.S.-China trade lane faces sharp correction as shippers reject surcharges and tariffs ease, while East Coast rates remain elevated (FreightWaves)

Market Mix

Retail

Steakhouse and upscale chains lead FSR growth – Full-service restaurants saw strong May performance, with steakhouses and American-style casual dining posting YoY visit gains despite economic uncertainty (Placer.ai)

Breakfast and Mexican casual chains see foot traffic dip – Mexican segment hit hardest, dragged down by On the Border’s bankruptcy and fast-casual competition from Chipotle and Qdoba (Placer.ai)

Hospitality

U.S. RevPAR rose 4.2% for week ending June 21 excluding Vegas and Houston – Summer travel and Juneteenth boosted demand, marking first occupancy gain since early May (STR)

Financings

Loans

Gaw Capital acquires Seattle-area office campus for estimated $90M – Firm took control of 550K SF Bellefield Office Park in Bellevue from Lionstone Investments and Talon Private Capital via deed-in-lieu deal (TheRealDeal)

Refinancings

Ron Moelis secures $65M refinance for NYC LIC multifamily – PCCP provides new loan on 197-unit 45-50 Pearson St, replacing prior $70M debt from Wells Fargo (CommercialObserver)

Structured Finance

QTS lands $1.5B loan to refinance data centers in Atlanta and Richmond – Blackstone-backed firm secures bank financing ahead of CMBS execution, backed by fully leased hyperscale assets (Bisnow)

Tishman Speyer lands $385M refinance for NYC office tower – New CMBS loan on 300 Park Avenue is backed by Colgate-Palmolive’s HQ, the building’s largest tenant (CoStar)

M&A

Building & Portfolio M&A

Blackstone acquires $718M industrial portfolio from Crow Holdings – Deal covers 6M SF across Dallas, Houston, and Chicago, with Crow and partners retaining 5% stake (TheRealDeal)

TA Realty buys Boston-area multifamily for $122M – Firm acquired The Robinson in Revere from Carlyle Group and Post Road Residential for $528K per unit (TheRealDeal)

Boynton Properties sells NYC Bronx lot to Soundview Empire for $60M – 9.3-acre Soundview site includes 1580 Story Ave and 1581 Lafayette Ave (CommercialObserver)

Distress Watch

Food packager Del Monte Pacific begins U.S. plant selloff amid $912.5M Chapter 11 bankruptcy – Del Monte Foods is marketing Hanford and Yakima sites as it shifts to an asset-light model (CoStar)

CMX Cinemas files for second bankruptcy – Theaters to stay open during restructuring as industry struggles with reduced attendance and long-term demand shift (Bisnow)

NYC rent-stabilized buildings get stopgap cash – Judge allows Joel Wiener’s 5,000 rent-stabilized bankrupt properties to cover upkeep through July 11 amid stalled Flagstar talks (Bloomberg)