The Brick Brief Monday October 27, 2025 

Hello Brick Brief readers, 

Happy Monday. In recent news, we’re seeing September inflation come in softer than expected, sellers outnumber homebuyers nationwide, and renewed optimism across the industrial market.

💸 Inflation comes in softer than expected
Inflation rose 0.3% in September and 3% year over year, coming in below forecasts and easing pressure on the Fed ahead of its expected 25 bps rate cut this week. A 4.1% jump in gasoline prices drove most of the monthly gain, but weaker shelter and goods costs and limited tariff effects kept overall inflation contained.

🏠 Sellers outnumber buyers nationwide
Sellers now outnumber buyers by 37% nationwide, confirming that supply has overtaken demand in many once-hot housing markets. Texas and Florida metros lead the imbalance with more than twice as many sellers as buyers, while Midwest and Northeast markets remain more balanced as tighter inventory sustains steady price growth.

🏗️ Ares and Makarora bet on industrial resilience
Ares and Makarora are betting on the strength of U.S. industrial real estate with their $2.1B purchase of Plymouth Industrial REIT. The deal gives them 200-plus infill assets across the Midwest and East Coast as leasing momentum accelerates and tenants commit to longer-term space in key logistics corridors.

30Y Mortgage: 6.19% (+1 bps) 

10Y Treasury Yield: 4.02% (+2 bps) 

WSJ Prime Rate: 7.25%

FTSE NAREIT Index: 784.84 (+0.32%) 

30-day SOFR Average: 4.19%

Inflation cools to 3% in September – CPI rose 0.3% MoM and 3% YoY, both below forecasts, easing pressure on the Fed ahead of next week’s rate cut while core CPI held at 3% as shelter and goods inflation moderated (CNBC)

Insight: Inflation rose 0.3% MoM in September as a 4.1% jump in gasoline prices offset weaker gains in shelter and goods, keeping the annual rate steady at 3%. Tariff effects stayed limited as firms shifted production to lower-tariff countries and absorbed modest cost increases instead of raising consumer prices. With inflation softer than expected and trade costs contained, the Fed now faces little resistance to cutting rates at its upcoming meeting.

US, China reach preliminary trade deal framework – Negotiators agreed on export controls, fentanyl, and shipping levies, removing Trump’s 100% tariff threat as both sides prepare for a final Trump-Xi summit to extend the tariff truce and resume soybean and rare-earth trade (Bloomberg)

Fed divisions widen ahead of October meeting – Policymakers back a second rate cut to support slowing jobs, but dissent grows over persistent service inflation and market bets on deeper easing (Bloomberg)

US, Vietnam outline trade deal – Vietnam to expand access for US exports as Washington offers limited zero tariffs after July’s 20% levy (Bloomberg)

Trump hikes Canada tariffs by 10% – The increase follows Ontario’s Reagan-themed ad criticizing his trade policy, prompting a pause in negotiations and fresh tensions over steel and auto levies (Bloomberg)

US firms feel strain from widening consumer divide – Low-income shoppers are cutting spending and driving lender bankruptcies, while affluent consumers keep overall demand afloat amid tariffs and inflation (Reuters)

Ares Management and Makarora Management will acquire Plymouth Industrial REIT for $2.1B, including debt. Plymouth 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. The deal follows Sixth Street’s unsolicited August bid to buy the REIT for $1.07B, which I discuss here.

🧱 Location and replacement cost advantage
Plymouth controls infill industrial sites that combine lower land costs with direct access to major population centers. These assets give Ares and Makarora exposure to logistics corridors that are expensive to replicate due to zoning limits and rising construction costs. Investors view this footprint as a durable source of rental growth as e-commerce, manufacturing, and nearshoring strengthen regional supply chains.

🧱 Platform scalability
Makarora and Ares gain a full operating platform with in-house leasing, property management, and acquisitions across the Midwest and East Coast. Owning this structure allows them to expand quickly through roll-ups or debt-equity recapitalizations that deploy Ares’ private-credit capital at scale. The platform’s regional footprint gives them a foundation to consolidate mid-tier industrial portfolios in secondary markets such as Ohio, Pennsylvania, and the Carolinas while maintaining local relationships and operating efficiency.

🧱 Industrial market regains momentum
Industrial leasing accelerated in Q3 as U.S. absorption doubled to 38.2M sq. ft. and vacancy held at 7.6%, the strongest since quarter early 2024. Demand strengthened across markets, with Prologis executives calling the recent quarter “a clear turning point” after a 15% QoQ jump in leasing. Tenants are finally committing to longer term contracts and expanding footprints as they accept the current trade environment and rebuilt resilient logistics networks.

Takeaway: Ares and Makarora’s purchase of Plymouth is a bet on both platform scalability and industrial resilience. Investors see lasting value in well-located infill assets, proven operators, and an environment where leasing and construction pipelines are again expanding.

Fannie Mae forecasts mortgage rates to end 2025 at 6.3% – Economists expect rates to decline to 5.9% by late 2026, boosting single-family originations to $1.88T amid improving housing demand (HousingWire).

Redfin reports sellers outnumber buyers by 37% nationwide – Texas and Florida metros lead with more than double the number of sellers to buyers as weak demand and high inventory tilt market dynamics (GlobeSt)

Pandemic-era “Zoomtowns” face steep comedown – Parcl Labs data show Sun Belt markets like Austin, Tampa, and Phoenix now lead the nation in price cuts and seller urgency, while Midwest and Northeast metros see tighter supply and rising prices (BusinessInsider)

Multifamily absorption remains strong but rent growth stalls – Tenants leased over 100K units for a third straight quarter, yet 9% vacancy and record 2024 deliveries keep rents nearly flat (Bisnow)

U.S. adaptive reuse surged to 24,735 apartments in 2024 – Chicago led with 880 new units as hotel conversions hit a record 9,100 and office conversions added 5,900; another 181,000 apartments are in the pipeline, mostly from former offices (RentCafe)

NCTA renews 53K SF office lease in Washington, DC – The broadband trade group extended its lease at 25 Massachusetts Avenue NW, which is owned by Norges Bank Investment Management and managed by Nuveen (Commercial Observer)

Coffee chains outperform QSR sector in Q3 2025 – Category visits rose 1.4% YoY versus a 2.7% QSR decline, led by Dutch Bros (+8.8%) and rapid growth from 7 Brew, Better Buzz, and Foxtail Coffee (Placer.ai)

Insight: Based on the growth of Dutch Bros and other drive-thru chains, we can conclude that customers currently are gravitating toward coffee spots that deliver speed, convenience, and consistency over ambiance. Everyone is so busy that coffee now fits into the rhythm of the day. Consumers grab it between commutes, errands, and meetings.

Starbucks, meanwhile, is pivoting its strategy under Chipotle’s former CEO to focus on the café experience and revive its “third place” identity, investing in sit-down formats and moving away from the grab and go model that once fueled its pandemic growth (even as this outperforms). They now intend to target a more relaxed, higher-end customer who has time to sit, enjoy their coffee, and work in the café, unlike the grab n go crowd rushing in and out. But that raises a a new question: why pick Starbucks when local cafes already deliver the charm and community that its more corporate vibe can’t replicate? I’d much rather sit in my quaint local cafe.

Brookfield is in negotiations to buy two South Carolina nuclear reactors – Santee Cooper approved exclusive talks to restart the sites to power data centers driving AI energy demand (WSJ)

Trump administration to speed data center grid ties – Proposal would cut interconnection reviews to 60 days to ease AI power bottlenecks and reduce electricity costs (Bisnow)

U.S. hotel RevPAR fell 0.7% YoY for week of 12–18 October 2025 – Occupancy slipped for a 17th straight week although ADR rose 1.7%, boosted by San Francisco’s Dreamforce conference although hurricane-hit Southeast markets weighed on results (STR)

Fosun International nears $900M refinancing for 2M-SF office tower 28 Liberty in New York, NY – The Hong Kong-based firm added $78M in equity as vacancy fell to 8% after renovations and new government leases (TheRealDeal)

Makarora and Ares agree to acquire Plymouth Industrial REIT for $2.1B – The deal follows an earlier bid from Sixth Street and reflects renewed strength in the industrial market as leasing reached its highest level since early 2024 (Bloomberg)

Money market asset manager Federated Hermes acquires $3.8B-AUM FCP Fund Manager for $331M – The deal marks its U.S. CRE entry, adding 259 properties and 75K apartments across 19 markets (Bisnow)

Douglas Elliman sells its property management arm to property manager Associa for $85M – The deal allows Elliman to retire $95M in debt owed to Kennedy Lewis and will generate a $75M after-tax gain, while Associa gains a five-year license to use the Elliman brand (TheRealDeal)

Insight: After merger talks with Anywhere Real Estate collapsed earlier this year, Douglas Elliman’s $85M sale stabilizes the company’s balance sheet by easing liquidity pressure and lowering debt.

TA Realty acquires 476-unit multifamily property San Merano at Mirasol in Palm Beach Gardens, FL for $193M – The 30-acre complex within Mirasol Country Club ranks among South Florida’s largest apartment sales this year (CommercialObserver)

Hyperion JV acquires 314-unit multifamily property The Centre in Cliffside Park, NJ for $165M – The venture with Benenson Capital Partners purchased the 2017-built asset from Arilex Realty after the seller defaulted on a $130M CMBS loan that matured in 2024 (TheRealDeal)

TPG Angelo Gordon and Aurora Capital acquire mixed-use office and retail building in Manhattan, NY for $75M – The JV is seeking $51.4M in financing for the 82K-SF Meatpacking District property purchased from Steven Elghanayan’s Epic Real Estate Group (CommercialObserver)

Brandywine Realty Trust buys out partner in 28-story mixed-use tower in Philadelphia, PA for $71M – The 570K-SF Schuylkill Yards asset is now wholly owned, paving the way to refinance its 8% construction loan (TheRealDeal)

401(k)-style plans hold over $45B in private real estate – Defined contribution assets include $37.5B in dedicated vehicles and $7.8B in open-end funds as allocations to alternatives rise (IREI)

BGO closes $800M U.S. Industrial Strategies Fund with $260M data center co-investment – The fund targets 3.2M SF of data centers with 800 MW of power across eight industrial projects developed with NorthPoint (ConnectCRE)

Flagstar Bank trims $324M in rent-stabilized loan exposure in New York, NY – The lender’s rent-regulated multifamily portfolio now totals $9.6B as it scales back after 2024 losses and shifts new CRE lending outside the city (TheRealDeal)

LuxUrban Hotels to liquidate after $123M in claims – The bankrupt hotel operator’s case was converted to Chapter 7 following allegations of gross negligence, unpaid taxes, and abandoned New York properties (Bisnow) 

CIM’s $61.5M loan on San Francisco, CA office heads for foreclosure – The firm defaulted after Yelp’s lease expired; lenders are pursuing receivership and a sale to recover losses (TheRealDeal)

AI browsers spark new competition in real estate search – OpenAI’s ChatGPT Atlas and Microsoft’s rival launch mark the start of intelligent search, reshaping how buyers find homes and agents (Inman)