Hello Brick Brief readers, 

Happy Monday. In recent news, we’re seeing a new Trump-EU trade deal, a rebound in CRE deals in Q2, and a continued widening of the housing market. 

We have a big week ahead of us packed with important news, including the Fed’s July interest rate decision, July consumer sentiment, unemployment numbers, and REIT earnings. 

This earnings cycle is key to understanding how tariffs are affecting profit margins and whether companies will raise prices, which could keep inflation elevated and delay rate cuts. Let’s lock in.

🌍 Trade Truce Brings Market Clarity
The Trump-EU deal to cap most tariffs at 15%, coupled with signals of progress in China negotiations, has eased fears of a global trade war. This growing clarity around trade policy reduces the risk of abrupt tariff shocks, helping businesses resume capex planning and potentially supporting a broader rebound in corporate investment and cross-border real estate capital flows.

🏢 CRE Activity Rebounds, but Pricing Diverges Sharply
Commercial property sales jumped 18% YoY in Q2 to $110B, with volume outpacing forecasts as investors returned to high-conviction sectors like retail and industrial. Yet prices continue to fall in office, retail, and multifamily, with value-weighted office prices now 46% below 2021 levels, signaling that while liquidity is back, it’s flowing into assets where values have reset and long-term resilience remains.

🏘️ Housing Market Fractures Widen
The U.S. now faces a 7.1M-unit affordable housing gap as rising costs and limited new supply squeeze low- and middle-income renters, many of whom spend over 30% of income on housing. At the same time, cash-flush buyers continue driving luxury home sales in New York suburbs and other wealthy markets, underscoring the growing bifurcation between constrained affordability and upper-tier housing demand.

30Y Mortgage: 6.81% 

10Y Treasury Yield: 4.39% 

WSJ Prime Rate: 7.50%

FTSE NAREIT Index: 781.47 

30-day SOFR Average: 4.35%

The Trump-EU tariff deal and progress with China reduce business uncertainty, potentially reviving delayed capital spending and stabilizing real estate investment planning across sectors.

Trump and EU strike deal setting 15% tariff on most goods – Pact averts trade war as EU agrees to major U.S. energy purchases and investment (WSJ)

Trump says US is close to a trade deal with China – President signals breakthrough in tariff talks but offers no details on timing or terms (Reuters)

Business equipment investment slows sharply in Q2 – Core capital goods orders fell 0.7% in June as tariff uncertainty and higher costs led firms to delay spending, signaling weaker capex ahead (Reuters)

Blackstone secured $1.8 billion from Wells Fargo to refinance a portfolio of roughly 80 commercial properties across 11 states, with nearly half the value concentrated in Florida industrial assets.

• The loan is backed by more than $3 billion in collateral, indicating a loan-to-value ratio around 60%, reflecting tighter lending standards in the current CRE environment
• About 45% of the portfolio’s value is tied to 21 Miami-Dade properties, showing the continued strength of Florida’s industrial market, especially in Doral’s logistics corridor
• The assets include stabilized last-mile industrial sites in Brooklyn and Long Island City, along with flex office and distribution facilities in top infill submarkets
• Blackstone has been selectively exiting industrial assets in Florida while refinancing others to free up capital without giving up long-term upside
• Wells Fargo is actively trimming its distressed office exposure, but just reported a jump in troubled apartment loans from $28M to $378M in its Q2 earnings call, signaling a shift in CRE credit risk
• The deal highlights how banks are still willing to lend against high-quality, well-leased industrial and flex office portfolios, but are demanding lower leverage and stronger locations

Takeaway: Blackstone’s refinancing underscores where CRE credit is still available, well-located, income-producing industrial and flex office assets. With lenders like Wells Fargo tightening elsewhere, especially in multifamily and office assets, capital is increasingly selective and tied to performance.

Trump-era policies are reshaping real estate fundamentals, with labor shortages, appraisal risks, and foreign buyer bans disrupting construction timelines, deal certainty, and capital flows in key markets

Trump’s immigration crackdown squeezes construction labor in major markets – ICE raids and stricter policies cause job site delays and spook landlords, hitting regions like Los Angeles and South Florida hardest (TheRealDeal)

Senators warn federal appraisal regulator is in 'chaos' – Ongoing leadership gaps and staffing cuts threaten appraisal quality and risk destabilizing real estate markets (Bisnow)

FHFA moves to end equitable housing finance plans for GSEs – Agency cites Trump executive orders and overlap with existing fair lending laws (NationalMortgageNews)

Texas bans real estate sales to certain Chinese, Iranian, North Korean, and Russian buyers – Law sparks deal cancellations and confusion among brokers ahead of September rollout (TheRealDeal)

The housing market remains deeply divided, as affordability worsens for renters and locked-in homeowners limit supply, while wealthy buyers bypass rate pressures and drive luxury sales higher

U.S. affordable housing shortage hits 7.1M units as home prices and rents climb – Nearly half of renter households are cost-burdened, with average rent up 21% since 2019 and new tariffs set to push costs higher (Homes.com)

Only 3% of homeowners feel comfortable listing their homes as 30-year mortgage rates hold near 6.75% – Tight inventory and rate lock-in keep owners on the sidelines, limiting supply (Homes.com)

Wealthy buyers use cash to avoid high rates, fueling luxury home sales in NY suburbs and top metros – Westchester sees 14% YoY sales growth (Homes.com)

Midwest and Sunbelt cities offer the most space for $1,500 rent – Wichita leads large cities with 1,329 sq. ft., while Manhattan renters get just 216 sq. ft. for the same price; California dominates list of least space for $1,500 (RentCafe)

Billion-dollar office trades continue as values reset – Trophy assets are selling at a premium while distressed urban offices see fire-sale discounts, with core and near-core deals expected to rise in H2 2025 (GlobeSt)

Suburban office loans show stronger credit metrics than urban – Lenders favor suburban deals for higher DSCR and lower LTV, while most volume remains concentrated in city cores (GlobeSt)

Insight: I think it’s no surprise that Class A trophy offices are holding up, but the growing interest in suburban offices stands out. They offer lower costs, easier conversions, and more reliable demand from non-tech tenants.

Ayers Saint Gross signs 25K-SF Baltimore office lease at Baltimore Peninsula – Design firm takes space in MAG Partners’ megadevelopment, one of the area’s largest recent deals (CommercialObserver)

U.S. port volumes drop 8% MoM in May as new tariffs hit gateways – West Coast ports see steep declines, with Long Beach down 26.3% and Los Angeles down 15% from April (FreightWaves)

Miami, Minneapolis, and Houston beat industrial forecasts – Miami and Minneapolis post falling vacancy, while Houston defies high deliveries with rent growth (GlobeSt)

Falling property prices alongside rising deal volume suggest real estate is entering a price-discovery phase, where sharper discounts are unlocking pent-up capital and resetting valuations across sectors.

U.S. commercial property prices fell broadly in Q2 as office, multifamily, and retail lagged industrial – Office prices now sit 46% below 2021 peak, while industrial remains the only sector posting YoY gains (CoStar)

U.S. commercial real estate sales jump nearly 18% YoY in Q2 to $110B – Retail, industrial, and office sectors lead gains as investor demand and constrained supply drive sharper rebound than analysts forecast (Bisnow)

Insight: Industrial prices stayed resilient in H1 2025 as supply chains proved too critical to pause. Despite tariffs and trade tensions, businesses continued investing in logistics infrastructure and stockpiling goods, even as leasing activity slowed due to business uncertainty after Trump’s Liberation Day.

Nuveen finds high-performing necessity retail centers share three traits – Strategic locations, best-in-class tenants, and sustainable traffic from market dominance (Nuveen)

Share of Target visitors shopping at Costco at least twice rises to 30.4% in H1 2025 – Up from 27.4% in H1 2021 (Placer.ai)

U.S. hotel RevPAR drops 3.3% YoY for fourth straight week – Declines driven by weaker demand and rates, with Las Vegas, Houston, and LA hardest hit (STR)

Blackstone secures $1.8B Wells Fargo refi on $3B office and industrial portfolio spanning 11 states – 45% of the properties securing the loan are located in Florida (TheRealDeal) 

EdgeCore closes $235M asset-backed bond – Proceeds will refinance construction debt and fund new data center development in Mesa, Arizona; the deal is backed by the Mesa campus and its revenue (CoStar)

Real estate firm American Equity Partners raises $157M in Israeli bonds at 6.6% – Deal is backed by four U.S. office and industrial properties, with proceeds used to refinance debt and fund growth (CoStar)

JP Morgan acquires Midtown West, NYC multifamily Riverbankfor $243.5M – Barings sells 44-story rental tower with $128.3M Freddie Mac financing (CommercialObserver)

Beitel Group acquires NYC multifamily development site in the Bronx for $84M – Lightstone sells site slated for 755 rentals after buyer secures $305M SCALE Lending construction loan (CommercialObserver)

Regent Properties acquires LA 19-acre development site for $72.6M – ABC sells one of the city’s largest undeveloped parcels after years on the market (CommercialObserver)

Slate Property Group to acquire Midtown NYC’s Stewart Hotel for $275M – Developer plans to convert the closed hotel into permanent affordable housing in partnership with Breaking Ground (TheRealDeal)

Taylor Morrison and Kennedy Lewis form $3B BTR partnership – New JV will fund Yardly build-to-rent projects across Arizona, Florida, North Carolina, and Texas as institutional interest in BTR surges (MultiHousingNews)

Insights Build-to-rent is gaining traction as institutions seek stable rental income with single-family upside; they often exit post-lease-up through either a recapitalization or a portfolio sale.

Pearlmark closes $267M Pearlmark Equity Partners II fund – New equity fund will target middle-market multifamily and industrial value-add deals across the U.S. (IREI)

Grant Cardone and Penn-Florida acquire Boca Raton, FL multifamily for $235M out of bankruptcy – Partners assume $155M Arbor Realty Trust loan (Bisnow)

AI-powered weather prediction is reshaping retail and logistics real estate nationally – Extreme weather drives Walmart and Prologis to use AI for site selection and inventory planning (Bisnow)