Hello Brick Brief readers, 

Thank you for your continued support! Today we’re tracking a 1.3% July gain in CRE prices, record CMBS issuance driven by trophy assets, and proptech’s shift toward integrated AI platforms.

🏢 CRE Values Stabilize in Core Markets
U.S. commercial real estate prices rose 1.3% in July as institutional buyers returned after months of declines, though values remain well below peak levels. With foreign capital pulling back, domestic investors with strong local execution are seizing opportunities.

💸 CMBS Issuance Hits Post-GFC High
CMBS volume surged to $58.8B in the first half of 2025, the strongest pace since the financial crisis despite record office delinquencies. New issuance is fueled by single-asset, trophy properties that investors still view as safe, while legacy office loans made before the pandemic are the main source of today’s delinquencies.

📱 Proptech Integration Gains Momentum
Proptech platforms and venture capital investors are moving away from scattered point tools and toward integrated, AI-driven systems that cut inefficiencies. Multifamily operators want streamlined billing and resident services, while construction-focused startups are attracting funding to reduce costs and timelines.

30Y Mortgage: 6.53% (+3 bps) 

10Y Treasury Yield: 4.28% (+3 bps)

WSJ Prime Rate: 7.50%

FTSE NAREIT Index: 765.96 (-1.68%)

30-day SOFR Average: 4.36%

U.S. consumer sentiment slips back into pessimistic territory in September – RCM/TIPP Index falls 2.2 points to 48.7, down from August’s 50.9 and below the neutral 50 mark, as tariff and inflation concerns weigh (RealClearMarkets)

U.S. job growth averages just 35K over past 3 months – Fed weighs September rate cut as unemployment holds at 4.2% and wages grow ~4%, highlighting split signals on labor market health (Reuters)

Proptech is entering a reset in 2025. Operators are overwhelmed by fragmented tools, residents want smoother digital experiences, and investors are demanding measurable returns. The sector is shifting toward integrated platforms that cut inefficiencies, with multifamily adoption and construction productivity driving the next wave of growth.

• Property managers face “point solution fatigue,” as separate tools for leasing, maintenance, and billing have created bloated tech stacks and rising costs. Owners are now pushing for bundled systems that streamline operations, reduce per-unit fees, and improve resident workflows in one place
• In multifamily, utility billing has long been a manual and error-prone process, with staff pulling bills one by one and allocating costs across tenants. Billee Technologies raised $9.15M to automate this workflow, promising faster and more accurate billing that saves staff time and improves the resident experience
• In construction, peer reviews of design documents are notoriously slow, often taking weeks as engineers pore over thousands of pages. LightTable raised $6M to use AI to complete this review in under an hour, flagging issues early and reducing costly change orders
• Construction teams also struggle with messy, unstructured PDFs of specs, RFIs, and drawings that are hard to coordinate. Trunk Tools raised $40M to turn those files into a structured, queryable database, functioning like a project-specific AI assistant that reduces errors and accelerates delivery
• Venture investors are backing this pragmatism. RET Ventures, Prudence, and others are funding platforms that embed AI into workflows and deliver portfolio-wide ROI. Construction is attracting the bulk of capital, while multifamily remains a close second as operators prioritize efficiency and tenant satisfaction

Takeaway: Proptech is moving away from scattered point tools and toward integrated platforms that solve real pain points. Multifamily operators want streamlined billing and resident services, while construction teams are embracing AI to cut costs and timelines. With investors rewarding ROI-driven solutions, the next winners will be platforms that consolidate workflows and deliver measurable efficiency gains at scale

US construction spending slips 0.1% in July – High mortgage rates weigh on housing, with residential gains offset by declines in multifamily and nonresidential projects (Reuters)

Vacation-town housing markets cool faster than others – Seasonal sales fell 3% YoY in July versus 1% in non-seasonal towns, with prices flattening as second-home demand and short-term rental appeal weaken (Redfin)

San Francisco is the only major metro where mortgage costs are back to 2018 levels – Oakland is next, with slower price growth and higher incomes driving the shift (Redfin)

Lifestyle office markets outperform – JLL says Live-Work-Play districts, where housing, offices, retail, and green space are integrated, lease faster, achieve rent premiums, and will dominate future office development (JLL)

AI firms fuel San Francisco office rebound – Leasing returns to prepandemic levels as Hines plans 1,225-foot tower and investors buy distressed assets at steep discounts (WSJ)

Grammarly leases 23K SF at 360 Park Avenue South in New York, NY – AI writing platform takes full floor in BXP’s 450K SF redeveloped Midtown South office tower (CommercialObserver)

US manufacturing shrinks for sixth month – Tariffs drive PMI to 48.7 as factories cut hiring despite AI spending (Reuters)

U.S. container imports face historic drop – July volumes rose 3.2% on tariff frontloading, but NRF projects a 17.5% decline over the rest of 2025 as tariffs drive a rare contraction in inbound traffic (FreightWaves)

J.P. Morgan Asset Management invests in advanced manufacturing facilities – Focus on high-power industrial sites enabling AI and robotics, supported by CHIPS Act incentives and reshoring (CommercialObserver)

The July uptick signals that institutional buyers are selectively re-entering U.S. core markets, creating openings for domestic managers to capture value while foreign capital retreats

CRE prices rise 1.3% in July – Institutional buyers return to core markets after five months of declines, though values remain 21% below peak (Bisnow)

Hamilton Lane’s Elizabeth Bell says U.S. investors are leaning into domestic opportunities – Foreign capital is pulling back due to policy, tax, and macro uncertainties, creating openings for managers with strong local execution capabilities (IREI)

Discount retailers gain sales as inflation pressures consumers – Dollar stores and supermarkets see stronger growth while shoppers cut back on restaurants and discretionary retail (CoStar)

CoStar and luxury hotels beat price-fixing suit – Judge dismisses claims they shared STR data to inflate room rates, though plaintiffs can amend and refile (Reuters)

Ashford Hospitality Trust accelerates hotel sales – REIT targets $98.2M debt repayment to Oaktree by year-end after selling assets like Boston’s Hilton Back Bay and Florida’s One Ocean Resort (CoStar)

Berkadia provides $58M Freddie Mac refinancing for 288-unit multifamily in Homestead, FL – Loan recapitalizes The Olivia owned by Grand Peaks Properties and Artemis Real Estate Partners (CommercialObserver)

Apollo completes $1.5B take-private of $50B AUM Bridge Investment Group – Deal adds $50B portfolio and boosts Apollo’s real estate AUM to $110B as Bridge continues operating independently (Bisnow)

BlackRock completes transaction for $7.3B net-lease investor ElmTree Funds – 122-property platform folds into BlackRock’s private financing arm to expand build-to-suit industrial capabilities (Bisnow)

Insight: Why is Apollo keeping Bridge separate while BlackRock is integrating ElmTree? Apollo is preserving Bridge as a standalone platform because its $50B in assets, hundreds of employees, and deep LP relationships represent a fundraising engine that would lose value if broken apart, so integration would undermine the very scale Apollo sought to acquire. BlackRock’s approach with ElmTree reflects the opposite calculation, as a $7.3B net lease specialist offers more value when absorbed into its private financing arm where its expertise can fuel a broader credit strategy. The contrast illustrates two different consolidation strategies in today’s market: maintain the independence of large platforms to protect scale and investor relationships, while subsuming smaller niche managers to amplify existing verticals.

Norges Bank and Beacon Capital acquire Midtown office tower in New York, NY for $571M – California State Teachers’ Retirement System and Silverstein Properties sell the 1M SF asset at a steep discount from its $860M 2021 valuation (Bisnow)

Cohen Brothers sells Midtown office building in New York, NY for $188M – Charles Cohen offloads 300K SF property at 3 East 54th St. to an undisclosed overseas buyer (CommercialObserver)

SL Green acquires two Midtown office properties in New York, NY for $160M – Claudio Del Vecchio sells the former Brooks Brothers flagship at 346 Madison Ave. and adjacent 11 E. 44th St., slated for 41-story office redevelopment (CommercialObserver)

Standard Communities, Housing on Merit, and Vistria acquire affordable multifamily complex in San Jose, CA for $370M – Greystar sells the 948-unit Park Kiely property, the largest apartment trade in Santa Clara County this year (TheRealDeal)

FCP acquires District West Gables multifamily complex in Miami, FL for $111M – Waterton Associates sells the 427-unit, two-building community at a slight discount from its prior trades (CommercialObserver)

JDS Development and partners acquire Miami Beach, FL development site for $120M – Michael Stern and David Martin’s group buys Bay Garden Manor and Bikini Hostel for planned 330-foot waterfront condo tower (TheRealDeal)

CMBS issuance surges to post-GFC high – $58.8B in 1H 2025 despite record office delinquencies and $23B in loans past maturity (Bisnow)

Insight: So why are lenders willing to underwrite new CMBS issuances despite record office delinquencies? New deals are concentrated in “flight-to-quality” transactions backed by trophy assets like Rockefeller Center, while delinquencies are tied to weaker legacy office loans made before the pandemic that can’t refinance under today’s conditions. This dynamic reflects a key Brick Brief (and well-known real estate) theme: a sharply divided office market where capital continues to flow into top-tier assets while older buildings face mounting challenges.

AI adoption drives proptech shift in H2 2025 – Sector focus turns to integrated platforms, construction productivity, and streamlined resident experiences, with multifamily leading demand (CommercialObserver)