The Brick Breakdown

Thank you for your continued support! Today we’re seeing continued weakness in consumer sentiment, a rebound in April retail sales, and renewed policy debate as carried interest reform is left out of the House tax bill.

📉 Tariffs Drag on Consumer Sentiment and Policy Risks Resurface
Consumer sentiment dropped to 50.8 in May, the second-lowest reading on record, with 75% of respondents citing tariffs as a key concern. One-year inflation expectations also jumped to 7.3%, while threats of a tariff snapback and a Moody’s credit downgrade are fueling renewed market uncertainty.

🏛️ Carried Interest Reform Shelved Again
Carried interest reform was left out of the House tax bill, reflecting continued lobbying pressure and minimal near-term revenue impact. While the proposal may reemerge in Senate negotiations, the odds of passage remain low, preserving the current tax advantage for private equity and real estate fund managers.

🛍️ Retail Activity Rebounds Ahead of Tariff Hikes
April retail sales rose 5.2% year-over-year, driven by Easter timing and pre-tariff purchases, with categories like furniture, home goods, and apparel seeing notable gains. Off-price and entertainment retail led in foot traffic growth, signaling that consumer demand remains resilient but increasingly selective.

This Week in Real Estate: Key Events & Data

Quick Markets

30Y Mortgage: 6.92% (-4 bps)
10Y Treasury Yield: 4.48% (+6 bps)
FTSE NAREIT Index: 776.31 (+1.26%)
30-day SOFR Average: 4.33%

Market Pulse

Rising tariff pressures, surging inflation expectations, and a credit downgrade are deepening economic uncertainty, as weak consumer sentiment and trade threats signal growing market instability

Consumer sentiment drops to 50.8 in May – One-year inflation expectations surge to 7.3% as 75% of respondents cite tariffs, marking the second-lowest reading on record (WSJ)

Import prices rise 0.1% in April – Nonfuel goods offset cheaper fuel as export prices also edge up 0.1%, with tariffs driving the largest 12-month fuel price drop since Oct. 2024 (BLS)

Trump admin threatens tariff snapback to April 2 levels – Bessent warns countries not negotiating in “good faith” could face maximum duties as US adopts tougher stance on trade (FT)

Moody’s downgrades U.S. credit rating to Aa1 – Cites rising debt and interest costs, warning that tax cuts and tariffs could worsen deficits and unsettle markets (Reuters)

Brick by Brick: Entrata Lands $200M from Blackstone at $4.3B Valuation

Entrata secured a $200M minority investment from Blackstone that values the Utah-based proptech firm at $4.3B as it expands its AI capabilities and deepens its reach in institutional real estate.

• Entrata supports over 12M residents across 35,000 multifamily communities, offering an end-to-end platform for leasing, payments, maintenance, and operations
• The investment will accelerate Entrata’s push into AI-driven property management and enhance tools that automate renewals, optimize workflows, and improve resident service
• Blackstone brings not just capital but strategic value through its global real estate portfolio, giving Entrata access to new clients, assets, and operational data
• Michael Ashley Schulman of Running Point Capital Advisors noted that the partnership aligns capital and distribution, enabling rapid expansion across the rental housing ecosystem
• The deal follows Silver Lake’s $507M majority investment in 2021, with Entrata continuing to expand platforms like ELI+ and Homebody to modernize operations and retention
• The minority structure reflects growing interest in flexible PE dealmaking that preserves founder control while unlocking scale

Takeaway: Entrata’s move into AI-driven operations highlights how artificial intelligence is transforming not just back-end efficiency, but the entire management model across rental housing. As more real estate owners adopt platforms that automate leasing, maintenance, and tenant engagement, AI is quickly becoming a foundational tool reshaping how assets are operated, staffed, and scaled. In deals like this, investors must bring more than capital. Blackstone’s ability to connect Entrata with institutional clients through its real estate network is what creates meaningful strategic value.

Policy & Industry Shifts

Carried interest reform remains stalled amid political resistance, while proposed LIHTC changes could expand affordable housing, though deep HUD cuts may undercut their effectiveness

Carried interest left out of House tax bill – Reform could resurface in Senate negotiations, but weak revenue impact and lobbying pressure make near-term change unlikely (GlobeSt)

Proposed LIHTC reforms could fund 527K units – Trump-backed bill would restore key 9% boost, lower bond thresholds, and expand rural incentives, but deep HUD cuts threaten overall impact (Bisnow)

Residential

April housing starts rose as builders pivoted to multifamily, with starts up 29% amid tariff-driven cost pressures and weak sentiment, while single-family construction and activity in markets like Downtown Los Angeles continued to decline

Multifamily starts jump 29% as single-family stalls – April housing starts rose 1.6%, driven by multifamily growth amid weak builder sentiment, inflation, and tariff-driven cost pressures (RisMedia)

Tariffs suppress April home construction – Single-family permits fell 6.2% while multifamily starts jumped 28.8%, as builders shift toward higher-margin rental projects (Realtor.com)

Los Angeles developers leave Downtown Los Angeles apartment boom behind – DTLA accounted for over 50% of multifamily deliveries pre-COVID, but just 19.1% between 2020 and 2024 (CommercialObserver)

Office

Office occupancy slips in early May – Weekly average dips to 53.4% as Tuesday peak hits 62.8%; NYC and San Jose see biggest declines while Austin and SF post modest gains (KastleSystems)

Industrial

Port of Long Beach sets April record with 867K TEUs – Importers frontload ahead of tariffs, but officials expect May volumes to drop over 10% on paused trade war impact (FreightWaves)

Market Mix

CRE lending jumps 42% in Q1 2025 – Office leads with 205% Y-O-Y growth, followed by healthcare (159%) and multifamily (39%), while industrial and retail originations declined slightly (ConnectCRE)

Retail

Retail activity strengthened ahead of tariff hikes, with strong April sales and off-price foot traffic gains signaling resilient demand, though falling store visits point to more selective, value-focused shopping

Off-price retailers see Q1 foot traffic gains – Burlington up 6.5%, T.J. Maxx 3.8%, Marshalls 3.3%, as shoppers linger longer and favor evening visits (Placer.ai)

Retail sales rise 5.2% YoY in April – Growth driven by Easter timing and pre-tariff purchases, marking strongest performance since early 2024 (Colliers)

Furniture and home goods sales jump 7.7% YoY – Big-ticket buyers race to beat tariff hikes, though store visits fall 15.3%, signaling more selective shopping (Colliers)

Apparel and beauty see seasonal gains – Sales rise 5.9% despite sharp traffic declines, as consumers spend more per trip but visit less often (Colliers)

Entertainment foot traffic soars 86.4% YoY – Long dwell times and strong demand reflect rebound in consumer appetite for in-person experiences (Colliers)

Data Center

Five Point’s $1B backing of PowerBridge signals growing investor appetite for large-scale data center infrastructure, while rising power demand is straining the U.S. grid and pushing developers toward fossil-fueled sites to meet near-term capacity needs

Infrastructure investor Five Point backs $1B launch of PowerBridge data center firm – Former Cumulus execs plan to develop gigawatt-scale campuses across North America (Bisnow)

Power demand strains U.S. grid as AI and data center growth outpace utilities – Developers shift to fossil-fueled sites with near-term capacity (CBRE)

Hospitality

U.S. hotel RevPAR fell 2.7% in early May – Weekend softness and top 25 market declines drove losses, though Philadelphia (+18.5%) and Boston (+15.5%) posted strong gains (CoStar)

Financings

Loans

Fairstead lands $120M in construction financing for NoVA affordable housing– Firm plans to redevelop historic Samuel Madden Homes into 207 affordable units (CommercialObserver) 

Wisconsin Dells resort lands $69M financing package – Hall Structured Finance and Nuveen Green Capital back Uphoff Ventures’ Medieval-themed Dellshire Resort with construction and C-PACE loans (CommercialObserver)

Structured Finance

Boston tower lands $650M refi led by Wells Fargo and BofA – One Congress secures SASB loan amid strong tenancy from State Street and InterSystems (Bloomberg)

Institutional Fundraising

Mesirow raises $1.25B multifamily fund – Chicago-based firm closes its fifth and largest fund to date, oversubscribed with 72% of capital from returning investors (PERE)

Distress Watch

Rising foreclosure activity signals mounting economic stress for homeowners, with elevated rates in states like South Carolina, Illinois, and Florida pointing to growing financial strain despite a resilient job market

Home foreclosures jump 13.9% in April – Rising economic pressures push foreclosure starts up 16.1% year-over-year, with South Carolina, Illinois, and Florida posting the highest rates (RisMedia)

CVS to acquire 64 Rite Aid stores in Pacific Northwest – Bankrupt Rite Aid to shutter 1,000 more locations and transfer pharmacy assets nationwide as part of wind-down (CoStar)

Proptech & Innovation

Blockchain creeps into real estate use cases – Industry sees early test cases in tokenization and smart contracts, but adoption lags due to legacy systems and uncertainty over risk tradeoffs (GlobeSt)