Hello Brick Brief readers, 

Happy Monday. Today we’re seeing billion dollar data center deals, hotter PPI inflation, and grocery anchored retail outperformance.

⚡ Data Centers And Power Capital Surge

Data center adjacent infrastructure is seeing billion dollar M&A activity as CECO Environmental agreed to acquire Thermon, an industrial heating and thermal solutions provider, for $2.2B to expand into data center linked thermal systems, while BlackRock’s GIP and EQT are nearing an $11.6B acquisition of AES to secure U.S. power generation tied to rising electricity demand. Blackstone also plans to launch a public vehicle to acquire tens of billions in stabilized, leased AI data centers and compete directly with Digital Realty and Equinix, as institutional capital scales exposure across digital and power infrastructure.

📈 Producer Prices Reignite Inflation Debate

US producer prices rose 0.5% in January versus 0.3% estimates and services margins posted their largest gain since 2009, while core PPI jumped 0.8% MoM and 3.6% YoY. Fed officials had previously indicated they would wait for clearer evidence that inflation is moving lower before continuing to cut rates, and sustained strength in core measures could push any policy easing further into the year if it occurs at all.

🛒 Grocery Anchors Lead Retail Outperformance

Traditional supermarket share slipped to 73.2% while Aldi, Trader Joe’s, and Whole Foods posted 8% to 10%+ visit growth, highlighting a shift toward value and fresh formats. Grocery anchored centers show 4.0% vacancy versus 6.3% for non anchored retail, command a 4.4% rent premium, and saw transaction volume jump 42% to $11B in 2025 as institutional capital increases allocations to necessity based retail.

US producer prices rise 0.5% in January, topping 0.3% estimates as trade services margins see biggest gain since 2009, perhaps reflecting tariff cost pass-through – Core PPI jumps 0.8% MoM and 3.6% YoY, prompting economists to lift core PCE forecasts (Bloomberg)

It remains too early to call a clear reacceleration in inflation, but the strength in services margins and core PPI is something to keep watching closely. If these pressures persist and flow through to core PCE, the Fed will likely delay rate cuts into later this year, if it cuts at all.

US payrolls seen rising 60,000 in February with unemployment steady at 4.3% - Slower hiring and muted retail sales would signal cooling labor momentum as Fed weighs rate path (Bloomberg)

U.S. commercial real estate investment volume surged 20% in 2025 – Total sales reached $472.6B across 30,400 deals as lower borrowing costs late in the year helped unlock sidelined capital and boost transaction activity (TheRealDeal)

Small town commercial property prices rise as big city assets slide – Equal weighted index gained 1.3% while value weighted fell 0.4%; annual sales rose 20% to $146.8B as lower priced secondary market deals outperformed (CoStar)

Chapter 12 farm bankruptcies jumped 45% in 2025 as low commodity prices squeezed margins - Farmland values rose 4.7% to $4,350 per acre, attracting investors seeking inflation hedge and consolidation (Bisnow)

Progressive design build gains traction in New York City construction – Developers adopt collaborative delivery model to protect schedules and control costs amid complex approvals and tight budgets (CommercialObserver)

Trump, NYC mayor discuss $21B affordable housing plan – White House meeting signals potential federal city partnership to expand housing supply amid ongoing affordability pressures (NationalMortgageNews)

U.S. construction spending rises 0.3% in December – Single family homebuilding and renovations drove gains, while nonresidential spending fell and total outlays declined 0.4% YoY amid tariff and rate pressures (Reuters)

Fannie Mae, Freddie Mac retained portfolios hit multiyear high – Expanded MBS purchases in January pushed combined holdings above prior peak following White House directive (NationalMortgageNews)

The 10Y has fallen over the past month, easing mortgage rates, but the question is how much of that move reflects expanded MBS buying versus true market demand. If policy-driven support is doing the heavy lifting, the recent rate relief may not hold.

More homeowners now have 6%+ mortgage rates than sub 3% rates – 21.2% of mortgaged owners had rates at 6%+ in Q3 2025 vs 20% under 3%, as elevated rates since 2022 shift the market toward refinancing and gradually ease lock in (Redfin)

National law firm leasing rises above pre pandemic levels – Firms leased 10.7M SF in 2025 vs 10.2M SF in 2024 and 7.7M SF in 2023, signaling sustained office demand from legal tenants (CommercialObserver)

Primary Ventures and Sigma Computing sign office leases at HSR Corporation’s 386 Park Avenue South office building in Manhattan, NY – The deals anchor more than 65K SF of new leasing activity at NoMad property (CommercialObserver)

MP Materials planned $1.25B rare earth magnet manufacturing campus on 120 acres in Northlake, Texas - Project will produce 10,000 metric tons annually and includes $400M DoD equity stake plus 10-year offtake agreement (Bisnow)

U.S. restaurants lead job growth in 2025 – Payrolls rose 1% vs. 0.1% overall as consumers favored affordable indulgences at sit down and beverage chains despite broader slowdown (Reuters)

Value and fresh format grocers drive traffic gains – Traditional supermarket share slipped to 73.2% while Aldi, Trader Joe’s, and Whole Foods posted 8%–10%+ visit growth amid barbell consumer spending (JLL)

Grocery anchored centers outperform as investor demand rises – Vacancy sits at 4.0% vs 6.3% for non-anchored retail, rents command 4.4% premium, and transaction volume jumped 42% to $11B in 2025 (JLL)

Recent grocery-anchored retail news included:

Publix expands into Kroger’s Cincinnati, Ohio backyard with plans for a dozen Kentucky stores by year-end - Kroger cuts prices and upgrades stores as grocery price war intensifies, boosting promotions and discounts for shoppers (WSJ)

DICK’s and Academy navigate softer traffic – DICK’s remains stable while integrating Foot Locker and expanding experiential formats, and Academy leans on digital growth and store expansion to offset weaker same-store visits (Placerai)

Lululemon balances domestic softness with global strength – U.S. revenue and traffic face pressure while international growth and product innovation support more diversified momentum into 2026 (Placerai)

Senior housing REIT Janus Living moves toward NYSE IPO – Company carved out of Healthpeak files publicly to tap investor demand for AI insulated, dividend growth real estate themes amid volatile equity markets (Reuters)

Blackstone plans tens of billions public data center acquisition vehicle – Firm to buy stabilized, leased AI facilities and compete with REITs like Digital Realty and Equinix (Bloomberg)

Surging 16 GW data center demand strains Mid Atlantic grid operator PJM – Competing White House and PJM reform proposals complicate interconnection, delaying large load projects and extending capacity tightness with no near term relief (CBRE)

Regional power supply gap widens through 2030 – Projected large load growth outpaces just 14 GW of mostly post 2030 generation additions, keeping capacity payments elevated and curtailment risk high (CBRE)

Neocloud CoreWeave shares fall 15% as capex doubles to $30B–$35B – AI cloud provider’s aggressive data center expansion raises margin and funding concerns, erasing $8B in market value (Reuters)

Hotel REIT DiamondRock Hospitality sees 2026 upside from major events and renovations – Affluent travel demand, World Cup exposure, and selective $80M–$100M annual capex plan support 2% RevPAR growth outlook (CoStar)

DiamondRock owns upper-upscale urban and resort hotels in markets like Phoenix, Key West and Sedona that are benefiting from affluent travel and major event tailwinds.

Luxury-focused hotel REITs continue to outperform broader lodging; Host Hotels recently reported resilient demand across its luxury portfolio and sold the Four Seasons Orlando and its Jackson Hole resort in Teton Village for $1.1B, capitalizing on strong pricing for high-end assets.

Paramount’s $111B all-cash bid for Warner Bros. Discovery would combine 12M SF of studio and office assets across Burbank, Hollywood, New York and London - Overlapping campuses and back-office space could drive consolidation and sublease supply in LA media market (CoStar)

BlackRock’s GIP and EQT near $11.6B AES utility acquisition – Infrastructure investors advance talks to buy U.S. power producer amid rising data center driven electricity demand (Reuters)

$5.1B listed Las Vegas casino operator Caesars Entertainment weighs takeover bids – Company reviews interest from Tilman Fertitta and other suitors, including potential management buyout (Reuters)

CECO Environmental agrees to acquire industrial heating and thermal solutions provider Thermon for $2.2B – Filtration company expands into data center linked thermal infrastructure in largest deal to date (Bloomberg)

Belvilla acquires rights to 10 former Sonder hotel properties across Queens, Brooklyn, New Orleans, Seattle, Denver, Philadelphia, Austin and Phoenix through Chapter 7 liquidation - European short-term rental operator backed by Oyo enters U.S. market as Sonder unwinds 79 assets (Bisnow)