The Brick Breakdown

Hello Brick Brief readers, 

Thank you for your continued support. In recent news, Treasury yields rose as stronger-than-expected May jobs data lowered chances of near-term Fed cuts, lenders showed confidence in industrial CMBS deals, and proposed HUD cuts raised concerns amid record homelessness.

📈 Yields rise as strong jobs report dims rate cut hopes
May’s job growth beat expectations despite signs of cooling, prompting markets to dial back bets on near-term Fed cuts. Bond yields climbed as Fed officials emphasized caution, citing persistent inflation and limited urgency to ease policy.

🏭 Industrial CMBS deals show lender confidence
Blackstone and Arden Logistics secured $1.7B in refinancing for nearly 230 stabilized industrial assets across the U.S., signaling strong demand for income-producing logistics properties. Despite rising cap rates and tariff uncertainty, lenders remain eager to back infill portfolios with solid lease coverage.

🏚️ HUD cuts deepen housing risks
Trump’s proposed $532M HUD cut would eliminate funding for over 160,000 supportive housing units amid a record homelessness crisis. Internal warnings flag staffing shortfalls and mounting risks of fraud and disruption in key aid programs if the plan advances.

This Week in Real Estate: Key Events & Data

Quick Markets

30Y Mortgage: 6.93% (+6 bps)

10Y Treasury Yield: 4.50% (+11 bps)

WSJ Prime Rate: 7.50%

30-day SOFR Average: 4.30%

FTSE NAREIT Index: 772.08 (+0.49%)

Market Pulse

A stronger-than-expected May jobs report pushed yields higher and reinforced expectations that the Fed will hold rates steady as markets adjust to reduced odds of cuts in 2025

Fed expected to hold rates steady in June – Cooling job growth and steady unemployment ease pressure to act, despite Trump’s call for a full-point cut and market hopes for two cuts in 2025 (Reuters)

U.S. job growth slowed to 139,000 in May – Business uncertainty from shifting tariffs and spending debates weighed on hiring, with prior months revised down by 95,000 jobs (Reuters)

Brick by Brick: $1.7B in Industrial Refinancing Shows Debt Market Appetite for Logistics

Recent CMBS activity suggests institutional lenders remain eager to back stabilized logistics portfolios across key U.S. markets, even with floating rates and vintage assets.

• Blackstone secured a $1 billion CMBS loan for a 59-property, 11.6M SF industrial portfolio across 13 states that was originated by Goldman Sachs, JPMorgan, Barclays, and German American Capital. The assets span cold storage, light industrial, manufacturing, and parking, and are 96.2% leased across 145 tenants. Proceeds will refinance an earlier loan held by BREIT, which acquired most of these properties between 2018 and 2020.

 • Arden Logistics Parks and Arcapita locked in a $700 million single-asset, single borrower (SASB) CMBS loan from Deutsche Bank and Barclays to refinance a 167-property, 7.2M SF light industrial portfolio across the U.S., with concentrations in Atlanta, Dallas, Indianapolis, and Boston. CBRE arranged the five-year floating-rate loan, which marks a key execution for Arden’s $2B logistics platform, which was launched in 2021.

Takeaway: Even with rising cap rates, logistics instability from trade uncertainty, and cautious underwriting, large-scale logistics assets remain a bright spot in credit markets. Institutional sponsors continue to attract capital for infill, diversified portfolios that offer stable income and leasing momentum across industrial segments.

Policy & Industry Shifts

Trump’s proposed HUD cuts and staffing reductions risk deepening the housing crisis, undermining oversight and disrupting aid for hundreds of thousands amid record homelessness

Trump proposes $532M HUD cut as homelessness hits record – Plan would defund 166,000 supportive housing units and disrupt aid for over 200,000 people (Bisnow)

HUD staffing cuts raise fraud and waste risks – Internal memos warn that mass resignations and layoffs under Trump’s second term have left key housing programs exposed and understaffed (Bisnow)

Residential

Rising affordability pressures are reshaping consumer behavior, with younger buyers stretching to enter the market, homeowners staying put, and even wealthy Americans increasingly opting to rent for flexibility

74% of U.S. homeowners prefer being home over anywhere else – Younger buyers face steep entry costs, with many working second jobs or relying on family gifts (Redfin)

Home insurance premiums have risen 38% since 2019 – Growth nearly doubles that of homeowner income, with sharpest increases in climate-vulnerable metros like Miami and Sacramento (Zillow)

One in 11 U.S. millionaires now rent – Renter households earning $1M+ tripled since 2019, with fastest growth in Houston, Dallas, and Miami as affluent Americans prioritize flexibility (RentCafe)

Multifamily

U.S. apartment occupancy held firm at 95.7% in May, but rent growth decelerated as Southern markets saw declines while coastal and Midwest cities drove gains

U.S. apartment occupancy held steady at 95.7% in May – Rent growth slowed to 0.26% as Southern markets posted cuts while coastal and Midwest cities led gains (RealPage)

All large apartment markets log net absorption in Q1, except Anaheim – The SoCal city lost 319 units while maintaining 96.3% occupancy amid strong regional demand (RealPage)

Regional

California’s largest cities are falling short of housing targets – High costs, slow approvals, and local red tape have left LA and SF well behind state mandates despite new pro-housing laws (CoStar)

Office

Demand for office space continues to rebound – Net absorption was positive for a fourth straight quarter, with 5.6M sf absorbed in Q1 2025 following 7.3M sf in Q4 2024 (IREI)

Leasing

Amazon expands U.S. office footprint with new WeWork deal in Silicon Valley – Leases entire Santa Clara building as it scrambles to meet return-to-office mandates across key metros (CoStar)

Evoke Advisors leases 24K sf at Irvine Co.'s Century City tower in Los Angeles, CA – Financial firm relocates HQ to 2121 Avenue of the Stars (CommercialObserver)

Industrial

Ocean rates spike 88% on East Asia–US routes – Shippers rush to capitalize on 90-day tariff pause, pushing spot rates to $6,100 per container as carriers raise prices amid surging demand (FreightWaves)

Market Mix

LightBox CRE Activity Index slips in May to 105.5 – Appraisal volume drops 19% as lenders grow cautious and early-year deal momentum shows signs of fading (ConnectCRE)

Retail

Retail foot traffic fell in May as consumers grew more selective, while targeted promotions and delivery innovations like Burger King's movie tie-in and Walmart's drone rollout helped offset weekday declines

Downtown retail visits fell 3.1% in May – Foot traffic dropped as consumers made more intentional trips, with weekday visits down and weekend traffic boosted by holidays and events (GlobeSt)

Burger King’s dragon-themed limited-time menu lifted foot traffic 11% by week’s end – The tie-in with How to Train Your Dragon drove the chain’s busiest day of the year ahead of the film’s June 13 premiere (Placer.ai)

Walmart expands ecommerce drone delivery to 5 states – 100 stores in cities like Houston and Atlanta will now offer fast home deliveries using drones through its partner, Alphabet’s Wing (CoStar)

Financings

Refinancings

Tritec lands $140M refinance for Bay Shore, NY multifamily – Truist provided the loan for the 418-unit Shoregate, which was completed in 2024 and is now 95% leased (CommercialObserver)

Reich Brothers secures $54M refinance for Huntsville, AL industrial facility – LoanCore provided the loan for the 650K sf Blue Origin-leased rocket engine site near Huntsville Airport; (CommercialObserver)

Structured Finance

Blackstone secures $1B CMBS loan to refinance 59-property industrial portfolio – BREIT’s 11.6M SF portfolio spans 13 states and is 96% leased, with top tenants including Penske and HD Supply (Bisnow)

Arden Logistics Parks and Arcapita secure $700M CMBS refinance – Deutsche Bank and Barclays provide five-year loan for 167-property industrial portfolio across major U.S. markets including Atlanta and Dallas (CommercialObserver)

M&A

Building & Portfolio M&A

Ponte Gadea buys Fort Lauderdale, FL apartment tower from Related Group for $165M – Spanish billionaire Amancio Ortega acquires 259-unit Veneto Las Olas after Related listed it for $230M in February (TheRealDeal)

Foxconn buys Houston, TX industrial park from Dalfen for $142M – Plans $450M investment to build AI server facility on 86-acre site, creating 600 jobs amid tech expansion in region (ConnectCRE)

Ares buys Chicago, IL industrial park for $58M – Marks second major Aurora deal in six months as firm targets pandemic-era logistics assets amid rising suburban rents (TheRealDeal)

BridgeGaps buys Spartanburg, SC multifamily from Orange Capital Partners for $53M – 297-unit garden-style complex was 92% occupied; Walker & Dunlop arranged $40M in financing (ConnectCRE)

Institutional Fundraising

Gray Capital launches $200M Midwest multifamily fund – Indianapolis firm targets $500M in apartment acquisitions through new vehicle for institutional and high-net-worth investors (IREI)

Distress Watch

Hooters shutters 30+ corporate-owned restaurants across U.S. – Chain pivots to franchise-only model amid bankruptcy, unlocking large-format spaces in key Sun Belt markets (CoStar)

Distressed Texas CRE debt headed to foreclosure tops $500M – Most loans are tied to 2021–2023 multifamily buys, and Harris County alone accounts for $267M as rising rates hit value-add strategies (TheRealDeal)

Savanna’s Brooklyn NY office building heads to foreclosure – Capstone to auction equity after $264M loan default on spec office project (CommercialObserver)

Proptech & Innovation

Real estate AI assistant Shilo raises $2.6M seed round – Backed by AZ-VC, the funding will accelerate product development and expansion of the real estate-focused platform (HousingWire)