The Brick Breakdown

Hello Brick Brief readers, 

Thank you for your continued support! Today we’re seeing mixed economic signals, a forecasted 2% drop in home prices in 2025, and turbulence in the data center sector. 

📊 Economy Sends Mixed Signals
Consumer sentiment and retail spending are rebounding after the spring tariff shock, giving the market a short-term boost. At the same time, leading indicators point to slower growth ahead as weak orders, rising jobless claims, and tariff-driven price pressures build beneath the surface.

🏠 Residential Market Fractures
Zillow expects home values to slip 2% in 2025 as inventory rises and sales tick higher, easing pressure on prices and rents. Still, record cancellations and a shrinking rent-versus-buy gap reveal buyers and sellers are hesitating in a market facing higher costs and new supply.

💻 Data Centers Face Crosswinds
Elliott is pressing Equinix to lift margins after a sharp stock drop, while SoftBank and OpenAI are scaling back their $500 billion data center plans amid internal disagreements and slow progress. xAI’s Memphis land buy shows power access is now a critical, and often contentious, battleground for AI infrastructure.

This Week in Real Estate: Key Events & Data

Quick Markets

30Y Mortgage: 6.78% (-3 bps) 

10Y Treasury Yield: 4.37% (-4 bps)

WSJ Prime Rate: 7.50%

FTSE NAREIT Index: 771.36 (+0.24%)

30-day SOFR Average: 4.35%

Market Pulse & Rate Watch

The rebound in spending offers short-term relief, but rising political pressure on the Fed and warning signs from leading indicators suggest economic risks and policy uncertainty are growing

U.S. leading indicators signal deeper slowdown – The Conference Board’s index fell 0.3% in June, with weak orders, rising jobless claims, and tariff-driven price pressures pointing to slower 2025 growth (WSJ)

U.S. economy rebounds after spring tariff shock – Consumer sentiment, retail sales, and stock markets are recovering as fears of inflation ease and spending resumes despite lingering risks (WSJ)

Insight: Don’t these two pieces contradict each other? Not quite. Consumer spending is rebounding after spring’s tariff shock, but leading indicators point to a weaker outlook as today’s momentum reflects short-term resilience, while forward data (from CB’s leading indicators) shows cracks starting to form.

Bessent calls for Fed probe – Treasury Secretary slams “mandate creep” and $2.5B renovation as Trump allies push for rate cuts (FT)

Brick by Brick: Opendoor Surges 212% as Traders Bet on iBuyer Comeback

Opendoor shares have jumped 212% over the past five trading days, closing 43% higher on Monday, as retail traders flooded in after hedge fund interest reignited hope in the last national iBuyer.

• Opendoor is an iBuyer that purchases homes directly from sellers and resells them to buyers, offering mortgage, title, and related services through its platform
• The stock hit $4.97 on Monday with 1.9 billion shares traded, briefly triggering a volatility halt; just a week ago, it was trading under $1 and at risk of being delisted
• Opendoor has become a full-blown meme stock, topping mentions on Reddit’s WallStreetBets and Stocktwits as retail traders piled in
• Hedge fund manager Eric Jackson of EMJ Capital posted a viral Twitter thread comparing Opendoor to Carvana in 2022, pointing to cost cuts, a pivot to an agent-assisted model, and a likely first quarter of positive EBITDA next month
• Jackson believes revenue could grow to $12 billion and argues that a 5x revenue multiple could eventually price the stock near $80
• Zillow and Redfin have exited iBuying, leaving Opendoor with no national competition in a sector it helped define
• Short interest remains elevated at 24% of float, while options volume surged past 3.4 million contracts, driven by small-lot, short-dated trades popular among retail investors

Takeaway: Opendoor’s rally has been driven by meme stock energy and retail enthusiasm following bullish posts from Eric Jackson, who made his name calling Carvana’s turnaround. But Jackson likely entered before the spike and is already sitting on substantial gains. Retail traders are chasing a stock that was nearly delisted just days ago.

Residential

The housing market faces rising inventory and weaker price growth as affordability concerns drive record cancellations, while buyers and sellers grow more cautious in a market marked by high costs, sluggish demand, and shrinking rent-versus-buy savings.

Zillow expects home values to fall 2% in 2025 – Inventory is rising toward pre-pandemic norms, easing pressure on prices and rents while sales edge up 2.5% from 2024 levels (Zillow)

Pending home sales cancellations hit record June level – 14.9% of deals fell through as buyer leverage and affordability concerns grew (Redfin) 

Homebuilders face rising costs and tariff risks – Firms head into H2 2025 grappling with higher material prices, labor uncertainty, and sluggish new-home demand despite rate buydowns (Reuters)

New listings hit 20-month low – Sellers pull back as high prices, slow demand, and rising rental appeal deter listings despite active inventory sitting near a 5-year high (Redfin)

Rent vs. Buy Gap Narrows – Realtor.com finds renting is still cheaper in 49 of 50 metros, but monthly savings are shrinking as buying costs inch closer, especially in Austin, San Jose, and Dallas (GlobeSt)

Compass subpoenas eXp and Redfin in Zillow lawsuit – Brokerage seeks communications on pre-MLS marketing and listing partnerships, accusing rivals of colluding to block its strategy (TheRealDeal)

Regional

Sun Belt metros lead in failed deals – Jacksonville (21.4%), Las Vegas (19.7%), and Atlanta (19.6%) saw the highest cancellation rates due to new supply and insurance costs (Redfin)

Office

Leasing

Clear Street leases 88K SF at 4 World Trade Center, NYC – Fintech firm expands HQ by adding 46th floor in Silverstein-owned tower under new 10-year deal (CommercialObserver)

Elsberg Baker & Maruri leases 39K SF at Empire State Building, NYC – Law firm signs full-floor lease at ESRT-owned Midtown tower to support growth (CommercialObserver)

Industrial

AstraZeneca announces $50B U.S. investment – Pharma giant will expand manufacturing across six states as Trump tariff threats push drugmakers to boost domestic production (Reuters)

Build-to-suit share rises to 34.5% – As speculative supply shrinks, build-to-suit projects are helping stabilize vacancy in Midwest markets like Indianapolis and Chicago (GlobeSt)

Leasing

Scotts Miracle-Gro signs 734K sf lease in Glendale, AZ – Firm takes Phoenix metro’s largest industrial lease of 2025 at 303 Crossroads from JV of Peakline and Clarius Partners (TheRealDeal)

Market Mix

Invesco believes US REITs offer defensive value – With 90% domestic revenue and sector resilience, they see REITs as undervalued amid trade-driven market uncertainty (Invesco)

Retail

Cinemark bucks theater slump – Visits are nearly back to pre-COVID levels as its value-focused, family-friendly model draws budget-conscious audiences amid industry volatility (Placer.ai)

Insight: Cinemark’s rebound highlights a broader trend I’m noticing where budget-friendly retailers and services are outperforming because value is driving consumer behavior in a price-sensitive, uncertain economy.

Data Centers

The data center sector is under some pressure as major projects stall and activist investors like Elliott push for cost discipline and higher returns after steep stock declines

SoftBank and OpenAI scale back $500B Stargate project – Partnership has yet to secure a single data center deal, now targeting a small Ohio site by year-end amid internal disagreements and Altman’s separate Oracle deal (WSJ)

Elliott ups stake in $76B data center REIT Equinix – Activist firm is pressuring the company to boost margins and revise capex after a 16% YTD stock drop (Bloomberg)

Insight: Elliott is betting that activist pressure can unlock value at Equinix as the data center sector faces higher capex amid soaring AI demand. By cutting capital spending, Elliott aims to boost near-term cash flow and shareholder returns, believing that investors will reward a more disciplined growth strategy.

xAI buys former power plant site for $10 – Elon Musk’s firm acquired the 114-acre parcel near its Memphis data centers to bolster power access amid legal scrutiny over unpermitted generators (Bisnow)

Hospitality

Hotel brands bullish heading into Q2 earnings – Hilton, Marriott, and Hyatt expected to outperform as tariffs pose limited drag, while REITs lag and focus on asset sales and buybacks (CoStar)

Financings

Loans

Scale lends $305M for Mott Haven multifamily project in NYC – Beitel secures financing for 755-unit 355 Exterior St. development with 25% affordable units and 11K sf of retail (TheRealDeal)

Nexus lands $180M loan for Dallas, TX senior living project – Beal Bank backs 193-unit Vivante Turtle Creek with memory care, medical office, and luxury amenities (TheRealDeal)

Santander lends $88M for Aventana multifamily project in Miami, FL – Pinnacle and Ram Realty secure financing to build 334-unit development near Aventura Mall (CommercialObserver)

Refinancings

Apollo provides $63M refinance for NY Long Island multifamily – Southern Land Company secures loan for 150-unit Carlow Wind Watch project in Hauppauge,(CommercialObserver) 

M&A

Building & Portfolio M&A

Industrial

Bridge Logistics buys Fontana, CA industrial complex for $84M – Firm acquires fully leased three-building Inland Empire portfolio from Hillwood (CommercialObserver)

Office

Vanbarton Group buys Midtown NYC office tower for $103M – Firm acquires 1011 First Avenue from the Archdiocese of New York with plans for 420-unit residential conversion (CommercialObserver)

Institutional Fundraising

Distress strategies are gaining momentum as Stockdale and Peachtree Group raised substantial new funds to reposition troubled West Coast commercial and hotel assets

Tariff concerns dampen global flows into U.S. CRE – Invesco warns a prolonged pullback could hit large gateway assets hardest, with minimal impact on smaller or nontraditional sectors (Invesco)

Stockdale Capital raises $700M fund for distressed West Coast assets – LA firm targets repositioning plays like San Diego’s Horton Plaza with global investor backing (CoStar)

Jonathan Rose closes $660M affordable housing fund – Capital will preserve and green affordable housing in high-cost metros like LA, Boston, and Chicago (BusinessWire) 

Peachtree Group launches $250M fund for hotel distress – The Atlanta firm aims to acquire capital-strained assets and offer rescue capital amid rising hotel refinancing challenges (Bisnow)

Distress Watch

CMBS distress rate dips to 10.8% – Delinquencies rose to 28.3% in June, while loans past maturity held steady at $32.4B with 37% nonperforming (CommercialObserver)

CRE CLO distress rate drops to 10.9% – June saw a 230 bps improvement as more loans stayed current, but over half remain past maturity amid refinancing challenges for 2021–2022 floating-rate loans (CommercialObserver)

Fortress Investment Group pursues NY real estate tycoon Charles Cohen’s assets after $535M loan default – Cohen Realty’s collapse triggered enforcement of a $187M personal guarantee (WSJ)

Ashkenazy’s Beverly Connection secures extension on $210M CMBS – Los Angeles mall fell into special servicing in 2020 after 26% value drop but avoided default amid leasing gains (TheRealDeal)