Hello Brick Brief readers, 

Thank you for your continued support! Today we’re seeing cooling momentum in industrial and housing markets, while capital continues to pour into the data center buildout reshaping real estate and energy.

📦 Industrial Cooling, But Still Resilient
Industrial vacancy hit 7.3% in Q2 as new supply outpaced demand for the 12th straight quarter, though absorption remained positive for a record 60th. Rent growth is slowing and construction has dropped 60% since 2022, but falling spec development is tightening the window for quality logistics space.

🏠 Lower Rates Ease Pressure, But Inequity Remains
Rising inventory helped push home prices down in 11 major metros, easing affordability as mortgage rates fell to 6.48%. But the lowest-income renters continue to bear the brunt of the housing shortage, with rent hikes over 10% higher than those faced by top earners since 2017.

⚡ Data Center Infra Buildout Faces Growing Pains
The data center boom is attracting major capital, but NRG’s weak data center power deal shows it’s struggling to capitalize on AI demand. Although late to the game, Apollo’s acquisition of Stream Data Centers is a clear play to grow AUM and gain exposure to the infrastructure buildout reshaping energy and real estate, as it plays catchup to early movers like Blackstone.

30Y Mortgage: 6.57% (-1 bps)

10Y Treasury Yield: 4.24% (+2 bps)

WSJ Prime Rate: 7.50%

FTSE NAREIT Index: 757.05 (-0.80%) 

30-day SOFR Average: 4.34%

Rising unemployment and weak hiring in July increase the likelihood of near-term Fed rate cuts as the labor market shows signs of softening

Fed officials warn July jobs data signals labor market turning point – Near-term rate cuts possible as rising unemployment and weak hiring heighten policy uncertainty (Bloomberg)

Trump imposes 25% tariff on Indian goods over Russian oil imports and announces 100% tariff on non-U.S.-made chips – New duties threaten over half of Indian exports and target China, heightening U.S.-India trade tensions and global supply chain risks (Reuters & Reuters)

Large U.S. banks say consumers remain healthy despite tariffs – Lenders note spending is steady but warn higher prices from tariffs could slow demand later this year (Reuters)

Apollo is buying a majority stake in Stream Data Centers to ride the $400 billion hyperscaler investment wave and expand its reach in digital infrastructure.

• Hyperscalers like Amazon, Microsoft, and Google are driving a $400 billion data center buildout in 2025, pushing demand for power, land, and capital-intensive infrastructure across key U.S. markets
• Apollo’s deal gives it a platform to deploy billions into long-term lease-backed campuses in metros like Dallas, Atlanta, and Chicago, with plans to secure investment-grade financing for future projects
• Stream has developed more than 20 data center campuses in partnership with institutional investors, and its management team will retain a minority stake
• The move comes as alternative asset managers pour into the space, following Blackstone’s $10B acquisition of QTS in 2021, now a $60B digital infrastructure powerhouse and one of the largest independent operators across North America and Europe
• Brookfield is also scaling up, launching a new AI-focused infrastructure strategy to capitalize on the same secular demand
• This marks Apollo’s first direct platform investment in the sector, and a way to deepen its presence in next-generation infrastructure after $38 billion invested since 2022

Takeaway: Apollo is chasing growth in a sector that's become core to private equity’s AUM flywheel. But it remains to be seen if it can catch up in a field where Blackstone has a multi-year head start and a $60 billion platform already in place.

Fannie Mae and Freddie Mac can now invest up to $4B in LIHTC projects – The White House doubled their Low Income Housing Tax Credit cap to $2B each, boosting affordable housing investment (Bisnow)

Falling residential investment and weak job growth are raising recession risks, with lower mortgage rates failing to revive demand in a still-uneven housing market

Goldman Sachs warns falling residential investment could push U.S. toward recession – Weak housing, affordability issues, and declining immigration risk amplifying economic headwinds (GlobeSt)

Weak jobs data pushed mortgage rates down to 6.48% – Zillow expects rates to end 2025 near the mid-6% range, but labor market fears mean lower rates aren’t bringing buyers back in (Zillow)

Lowest-income renters faced rent hikes 10.3% higher than top earners from 2017–2024 – Only 20% of metros added enough supply to curb rents, with affordability pressures hitting older, cheaper apartments hardest (TheRealDeal)

Milwaukee tops the list of resilient U.S. housing markets – Home sales jumped 12% YoY and prices rose 8.2%, while Las Vegas leads the fastest-cooling metros as inventory surged 44.8% and sales fell 10.2% (Redfin)

Homebuying affordability improved in 11 major metros – Oakland, West Palm Beach, Jacksonville, and San Diego saw the biggest drops in income needed to buy as prices fell and inventory rose (Redfin)

Office performance remains highly fragmented, with national occupancy stuck near 53% even as markets like Manhattan and Miami show signs of recovery through stronger leasing and absorption

Office occupancy remains a major challenge as 2025 data shows a more fragmented and cautious U.S. market – Miami stands out with consistently positive absorption while most markets struggle to regain momentum (CoStar)

Office occupancy averaged 53.6% last week across 10 major cities, down 1.2 points – San Francisco and Austin posted the biggest drops, with peak day occupancy at 63.5% (KastleSystems)

Manhattan office leasing jumped 49% above five-year average in July – Availability dropped to 17.2% while rents stayed flat (CBRE)

Milbank relocates to 64K SF at Oxford Properties and Norges Bank’s office tower in Washington, DC – International law firm expands regional presence with move to 1101 New York Avenue NW (ConnectCRE)

WeWork signs 55K SF lease at Moinian Group’s 245 Fifth Avenue in NYC – Flexible office provider to open new location in mid-2026, replacing an expiring lease (CommercialObserver)

Frank D. Lanterman Regional Center inks 51K SF consolidation lease in Glendale, CA – Nonprofit signs 10-year deal at Onni Group’s 611 Brand office tower (CommercialObserver)

New York State Office of General Services signs 10-year, 44K SF lease at Brookfield’s 1 New York Plaza – Deal brings a key government tenant to the 2.58M SF Financial District tower (CommercialObserver)

Seaport Entertainment Group renews 37K SF HQ lease in Manhattan’s Financial District – Signs 10-year deal to remain at Jack Resnick & Sons’ One Seaport Plaza (CommercialObserver)

Behar Gibbs Savage Paulson renews 36K SF lease at One World Trade Center in Long Beach, CA – Law firm extends 35-year HQ commitment in JLL-brokered deal as legal sector leasing surges (TheRealDeal)

Cloudflare leases 34K SF at 1 World Trade Center in NYC – IT services firm opens new hub in Durst/Port Authority-owned tower (CommercialObserver)

Industrial fundamentals remain stable despite rising vacancy, as tenants front-load inventories and new supply slows sharply, creating near-term competition for quality logistics space

Apple plans $100B investment in domestic manufacturing – The move aims to shift fabrication and assembly of key components to the U.S. and reduce reliance on foreign suppliers (Bisnow)

U.S. industrial vacancy rose to 7.3% in Q2 as new supply outpaced demand for the 12th straight quarter – Net absorption stayed positive for the 60th consecutive quarter, but slowed to 23M SF, while rent growth moderated (Colliers)

Industrial construction pipeline dropped to 281M SF, down 60% from peak 2022 levels – Dallas-Fort Worth, Houston, and select Sun Belt markets remain construction hotspots despite the national slowdown (Colliers)

Rent growth is slowing, but warehouse/distribution rents still rose 4% YoY to $10.54/SF – Vacancy is expected to peak near 7.6% before demand rebounds with greater economic and policy clarity (Colliers)

Leasing and absorption rebounded in Q2 as tenants moved past tariff volatility – New supply is dropping 30% in H2 2025, creating a short window for prime logistics space (Prologis)

Utilization rose to 85% as firms front-loaded inventories – Spec development fell over 75% from peak, fueling competition for quality space (Prologis)

CRE lending remains tight despite strong bank profits – Credit risk is stable, but high rates and regulatory pressure are keeping new loan activity muted (Trepp)

Retail and industrial absorption turned negative in Q2 as economic uncertainty and CEO caution slowed demand – Office leasing showed improvement, while multifamily vacancies continued to fall with record demand (GlobeSt)

Nontraditional anchor tenant In-N-Out drove 12.2% YoY gains at Boise Towne Square – The mall continues to outperform as dining traffic lifts visits for other tenants  (Placer.ai)

Insight: In-N-Out works as an anchor because people love it enough to drive across town for a burger. That kind of loyalty brings steady foot traffic and energy most retail centers can’t generate on their own.

Indoor mall traffic rose 1.3% YoY in July – Open-air and outlet malls nearly matched 2024 levels, signaling a modest retail rebound  (Placer.ai)

Mid-July sales events fueled a temporary visit spike – Late-month softness shows promos pulled demand forward instead of driving lasting growth (Placer.ai)

Life sciences continue to struggle as lab vacancy rose to 22.7% in Q2 and rents fell, with weak absorption and limited venture funding weighing on the sector

Life sciences lab vacancy climbed to 22.7% in Q2 as absorption turned negative – Leasing activity and tenant demand increased, but new supply outpaced gains (CBRE)

Average lab rents fell to $71.69/SF – Venture funding dropped to $5.1B, highlighting capital headwinds for life sciences in Q2 (CBRE)

McDonald’s beat Q2 earnings and revenue expectations as same-store sales rose 3.8% YoY, driven by value-focused promotions that resonated with low-income customers. Executives say reengaging lower-income diners is critical since they visit more frequently than other groups, but the company remains cautious about the near-term economic health of these customers (CNBC) 

Airbnb beat Q2 earnings expectations and provided a better-than-expected Q3 outlook thanks to encouraging summer travel, although it warned that growth rates may not keep up later this year due to tough year-ago comparisons (Bloomberg)

Energy company NRG’s shares fell 16%, their worst drop since 2022, after its first data center power deal disappointed investors with just 295 MW of contracts, falling short of recent deals by rivals and stoking doubts about the size and profitability of its data center opportunity (Bloomberg)

Insight: NRG’s drop reflects investor frustration as the company fails to capitalize on AI-driven energy demand, as its 295 MW deal falls well short of peers like Constellation. The stock is still up 60% YTD on expectations that data center growth will eventually boost earnings.

Rialto and Hines acquire $100M in Midtown Manhattan office loans from Flagstar Bank – Debt backed by three Hilson Management properties amid limited refinancing options (TheRealDeal) 

Apollo is acquiring a majority stake in data center builder Stream Data Centers – The deal expands Apollo’s push into large-scale digital infrastructure as AI demand surges (Bloomberg)

S2 Capital acquires industrial operator Fort Capital in Dallas – Fort brings 11M SF portfolio and $350M pipeline; deal follows S2’s $343M capital raise and expansion into value-add industrial (TheRealDeal)

Sentinel Real Estate buys 328-unit Venue at Orange in Redlands, CA for $148M – LuxView Properties is the seller in the Inland Empire’s first major multifamily sale since 2021 (IREI)

Kennedy Wilson acquires Pratt Park Apartments in Seattle, WA for $80.5M – California firm adds to area holdings with purchase of the Central District complex from Rockwood Capital and Security Properties (CoStar)

Hearthstone acquires 271-acre Hitch Ranch site in Moorpark, CA for $59M – Investor to develop 755 homes with lots sold to Lennar and Comstock; 15% of units set as affordable housing (TheRealDeal)

Claire’s may close over 1,100 U.S. stores and warned of possible liquidation – The teen accessories chain filed for Chapter 11 bankruptcy again as weak mall traffic, debt, and tariffs forced a major restructuring (CoStar)

Insight: This time, Claire’s might be heading for liquidation, so what went wrong? A low-margin model built for malls couldn’t withstand 25% tariff-driven cost spikes and a customer base that now shops online, leaving the company with rising expenses, falling traffic, and no clear path forward.

Wells Fargo Center in Denver reappraised at $115M, down 76% from 2019 – CMBS investors face steep losses as vacancy tops 27% and interest payments on the $277M bond are cut for the first time (Bloomberg)

Geolava launches AI-powered platform for remote commercial property intelligence – Investors gain real-time building insights without in-person visits (GlobeSt)