Hello Brick Brief readers, 

Thank you for your continued support! Today we’re seeing a new challenger emerging to tackle the housing affordability crisis, renewed optimism across real estate capital flows, and discount retailers thriving as consumers trade down.

🏠 Affordability Crisis and Modular Housing
With U.S. home prices up 2.9% YoY in Q2 2025 and affordability pressures stalling buyers, Reframe secured $20M in Series A funding to expand its modular housing microfactories. Once projects clear restrictive zoning, its model can cut costs and timelines roughly in half, offering a scalable tool to ease shortages if more sites become available.

🏢 Real Estate Capital Flows
Investor competition is reviving as JLL’s Bid Intensity Index rose in July for the first time since December, supported by easing bond volatility and trade uncertainty. CBRE reported 9 bps of cap rate compression in H1 2025, signaling that cap rates may have peaked and real estate valuations could be stabilizing as stable Treasuries and improving macro conditions support investor demand.

🛒 Retail Capital Shifts Toward Necessity Assets
Single-tenant net lease retail sales rose 9.6% YoY to $5.7B in 1H 2025, with median cap rates holding at 6.8% and pricing climbing 8% to $309/SF as investors targeted high-credit tenants and smaller formats. Convenience stores and QSR assets proved most resilient, with convenience store sales up nearly 16% to $796M at 5.4% cap rates and QSR sales reaching $1.01B at 5.6% despite a slight traffic dip, while drugstores and discount stores moved in opposite directions.

30Y Mortgage: 6.52% (-2 bps) 

10Y Treasury Yield: 4.27% (-2 bps)

WSJ Prime Rate: 7.50%

FTSE NAREIT Index: 770.90 (-0.27%) 

30-day SOFR Average: 4.35%

US consumer confidence dips in August – Conference Board index falls 1.3 points to 97.4 as more Americans say jobs are hard to get, reaching the highest level of difficulty since 2021 (Bloomberg)

Insight: Jerome Powell’s recent press conference made clear that the Fed is closely watching consumer inflation expectations and confidence, since tariffs could push those expectations higher and create more lasting inflation pressures.

Reframe Systems secured $20M in Series A funding to expand its modular housing microfactory model, betting that faster, cheaper production can ease America’s housing shortage.

•Housing affordability remains under pressure. FHFA reported prices rose 2.9% YoY in Q2, while Realtor.com noted the market is frozen as buyers are squeezed by rates and tight supply in the Northeast and Midwest. In particular, the Northeast is seeing some of the fastest home price growth in the nation, making modular construction a potential way to deliver cheaper homes more quickly in high-demand markets like Boston where Reframe is already active
• Reframe’s microfactories can be set up in under 100 days and produce five single-family homes per week, far faster than the nine-month average construction backlog facing traditional builders
• Modular construction accounted for 8.8% of apartment starts in 2024 and can cut costs by 20% to 30% compared to conventional builds, since units are factory-assembled, shipped in sections, and completed on permanent foundations at the site
• Modular apartments are created by stacking prefabricated units into mid-rise or garden-style buildings, giving developers a way to deliver multifamily housing at scale more quickly than traditional methods
• Unlike manufactured housing, which is entirely factory-built under HUD code, modular homes must comply with local zoning and building codes, placing them within traditional planning rules while still offering speed and cost advantages
• The company has active projects in Boston and California, where shortages are driven by restrictive zoning, high costs, and disaster recovery needs. Reframe’s model takes advantage of zoning carve-outs such as Massachusetts’ Chapter 40B and California’s builder’s remedy, which let certain projects bypass local restrictions and move forward more quickly
• Reframe is using robotics and industrial automation to reduce reliance on scarce construction labor and lower project risk, positioning modular as a faster and more predictable solution for high-demand markets

Takeaway: Modular housing cannot remove zoning as the root cause of shortages in Boston and California. But once projects are approved, it cuts construction costs and timelines in half, delivering homes faster and at more affordable levels. With affordability deteriorating and the Northeast seeing some of the sharpest price gains, Reframe’s microfactory model offers a way to expand supply and ease pressure in markets where traditional builders cannot keep pace.

Feds cut National Science Foundation HQ footprint by over 380K SF – Seeking 240K–280K SF in Alexandria, VA under a 48-month lease after its 661K SF Eisenhower Ave. headquarters was reassigned to HUD (Bisnow)

NYC mayoral candidate Zohran Mamdani pledges rent freeze – Small landlords warn of sell-offs as higher costs and stalled permits already squeeze rent-stabilized property owners (WSJ)

U.S. housing is stalling under affordability pressures, with home prices up 2.9% YoY in Q2 2025 but demand weakening, while manufactured housing is outperforming CRE with just 0.1% CMBS delinquencies and cap rates now tighter than multifamily

U.S. home prices rise 2.9% YoY in Q2 2025 – Prices were flat QoQ, with June down 0.2% as affordability pressures mount (FHFA)

Home prices rise 1.9% YoY in June – Case-Shiller shows slowing appreciation as supply nears 10-year high and affordability pressures weigh on demand (Realtor.com)

U.S. housing market stalls – Buyers squeezed by rates, sellers delisting, and builders retreating as regional divides widen between oversupplied South/West and tight Northeast/Midwest (Realtor.com)

Manufactured housing outperforms CRE – CMBS delinquencies at 0.1% vs 1.34% multifamily, with 2025 cap rates (5.13%) now tighter than multifamily (5.67%) as affordability fuels demand (Trepp)

U.S. office vacancy hits 19.4% in July – Asking rents rose 3.3% YoY to $32.72 PSF as 42% of post-2023 office sales closed at discounts, led by Houston (69%), San Francisco (67%) and Manhattan (64%) (CommercialCafe)

EY signs 102K SF office lease at Ten Twenty Spring, Atlanta, GA – Tenant will relocate 3,000 employees from downtown to Midtown tower owned by Portman and Perform Properties/Blackstone (REBusinessOnline)

Hyundai lifts U.S. investment to $26B through 2028 – $5B increase funds new robotics plant with 30K-unit capacity and a $5B steel mill in Louisiana as tariffs reshape auto production (Bisnow)

Mid-Atlantic factory activity improves in August – Richmond Fed index rises to –7 from –20 in July as new orders, employment, and shipments strengthen, though inflation pressures increase (WSJ)

Port of NY & NJ container volume climbs 4.9% YoY in 1H 2025 – Imports rise 3.5% and exports 4.2% to 4.4M TEUs, reinforcing its position as the East Coast’s busiest port despite tariff headwinds (CushmanWakefield)

Port of NY & NJ warehouse vacancy jumps 450 bps YoY to 12.2% – Over 1.5M SF of new deliveries drive –392K SF absorption, while leasing surges 75.5% YoY to 1.7M SF and rents hold near $20/SF (CushmanWakefield)

JLL’s Global Bid Intensity Index ticks up in July – First rise since Dec. 2024 as easing bond volatility and trade uncertainty revive investor competition and capital flows (ConnectCRE)

All-property cap rates fell 9 bps in H1 2025 – CBRE notes early signs of compression as stable Treasury yields and improving macro conditions suggest the market has passed its peak (CBRE)

Dollar Tree visits surged in Q2 2025 – Dollar General visit growth cooled to 2.9% in July from 12.2% a year earlier, though it still captured 58.7% of combined traffic as both chains eye expansion (Placer.ai)

Single-tenant net lease retail sales rose 9.6% YoY to $5.7B in 1H 2025 – Median cap rates stabilized at 6.8% and pricing climbed 8% to $309/SF as investors focused on high-credit tenants and smaller formats (Colliers)

Convenience and QSR assets showed resilience – C-store sales rose nearly 16% vs. 2H 2024 to $796M at 5.4% cap rates, while QSR sales reached $1.01B at 5.6% cap rates despite traffic dipping 0.6% YoY (Colliers)

Drugstores and dollar stores diverged – Drugstore visits fell 3.6% with $444M in sales at 7.7% cap rates, while discount stores saw 2.9% traffic growth and $527M in sales at 7.1% cap rates (Colliers)

Community pushback ends 515-acre data center project near Richmond, VA – Diode Ventures drops Roxbury Technology Park despite initial approval (Bisnow)

VC funding for Massachusetts biotech drops 17% YoY to $2.75B – Lab vacancy climbs to 27.8% statewide and 38.3% in Boston as federal cuts and weaker demand stall recovery (Bisnow)

Alloy Development lands $535M financing for 583-unit tower in Brooklyn, NY – Kayne Anderson provides $375M loan and Vistria Group adds $120M equity for One Third Avenue (CommercialObserver)

S3 Capital provides $67M construction loan to Continuum Company for 57-unit condo in Bay Harbor Islands, FL – Financing supports La Baia North, the sister project to the sold-out La Baia South (CommercialObserver)

Starwood Property Trust provides $500M refinance for 2.4M SF industrial portfolio in Westchester County, NY – Dune Real Estate Partners and Robert Martin Company secure loan for 42 properties (CommercialObserver)

Hudson Pacific lands $285M refinancing from undisclosed lender for 668K SF office in Seattle, WA – Five-year, 6.16% loan recapitalizes a 99% leased Class A tower in Denny Triangle (IREI)

Macerich sells 2.1M SF Lakewood Center mall in Lakewood, CA for $332M – Pacific Retail, Lyon Living, and Silverpeak plan mixed-use redevelopment of the 89% leased property (CommercialObserver)

Ram Realty Advisors buys 197K SF Shoppes at Jupiter in Jupiter, FL from Orion Real Estate Group for $53M – Whole Foods to anchor alongside Cinépolis and Staples (CommercialObserver)

DLJ Real Estate sells 113-key Nine Orchard Hotel in New York, NY to McGuire Moorman Lambert Hospitality for $92M – Landmark property includes Corner Bar, Swan Room and Blue Room (CommercialObserver)

Equity Residential sells 203-unit multifamily in Malden, MA to FPA Multifamily for $97M – Buyer acquires Arrive Malden at ~$478K per unit (TheRealDeal)

Rising Realty and DigitalBridge default on $300M CMBS loan for One California Plaza in Los Angeles, CA – Court appoints Trigild as receiver for 1M SF tower, now valued at $121M with 63% occupancy (TheRealDeal)

Brookfield faces foreclosure on Brooklyn Commons office tower in Brooklyn, NY after defaulting on $133M loan – Rialto Capital files pre-foreclosure on the 19-story property (CommercialObserver)

Modular housing startup Reframe Systems raises $20M – Will scale microfactories that produce single-family homes, duplexes, and townhomes to target housing shortages and disaster-hit areas (Bisnow)

Federal solar tax incentives expire end of 2025 – Proptech firms like SolMicroGrid, IncentiFind, LuxWall, Aeroseal and Budderfly step in with microgrids, efficiency tech and alternative incentives to offset lost savings for CRE owners (CommercialObserver)

Experts push for oversight of AI systems in New York office buildings – Calls to regulate biometric access, ventilation and power controls like fire safety equipment (CommercialObserver)