Hello Brick Brief readers, 

Thank you for your continued support! Today we’re seeing hybrid work normalization, industrial demand concentrated in key logistics hubs, and states introduce data-center specific electricity rates. 

🏢 Hybrid Work Defines the 2025 Office Landscape
Hybrid work has normalized as U.S. office rents inched up 0.1% YoY in October to $32.81 per SF and vacancy moved down to 18.6% as tenants committed to long-term hybrid plans instead of a full RTO. Manhattan and Miami office markets remain tight while Seattle and San Francisco sit above 26% vacancy, although conditions should improve as strong tech leasing begins to show up in occupancy data.

📦 Industrial Demand Remains Concentrated Across Southern and Sun Belt Logistics Hubs
Industrial demand remains concentrated in modern post-2020 facilities as Dallas/Ft. Worth, Phoenix, Savannah, Houston and Kansas City each logged more than 10M SF of absorption over the past year. Shallow-bay warehouses stayed tight at 4.8% vacancy while big-box performance varied sharply, with Oklahoma City, Nashville, Richmond and Columbus leading national rankings for leasing and absorption.

⚡ States Push New Electricity Rates as AI Data Centers Scale Rapidly
Ten states are introducing data-center-specific electricity rates as residents’ rising utility bills have become political. Regulators are moving to require collateral, minimum-usage payments and full funding of grid-upgrade costs to filter out speculative projects; hyperscalers remain willing to absorb these higher costs and are even building megacampuses in storm-prone regions since fast, reliable power access determines how quickly they can bring new data centers online.

Investors shift toward MBS as heavy AI-driven corporate bond issuance makes high-grade credit expensive – Mortgage bonds have delivered their best returns in 20 years and are drawing fresh demand from REITs and banks while corporate spreads sit near record-tight levels (Bloomberg)

Stalled homebuying is propping up home-related retail – Older first-time buyers, stretched affordability and $3,100 mortgage payments are keeping households renting longer, which is sustaining spending on home goods despite a 20% drop in home sales (GlobeSt)

Boston apartment rents fall as economic jitters and weaker biotech hiring push vacancies to pandemic highs – Landlords cut prices 10%-15% and offer heavy concessions as international student declines and Trump-era visa and research policies reduce demand (Bloomberg)

U.S. office rents inched up 0.1% YoY in October – National average rent reached $32.81 per SF as vacancy fell 90 bps to 18.6% with Los Angeles leading growth and Seattle posting the highest vacancy (TheRealDeal)

Hybrid work is now the permanent norm – Vacancy sits at 18.6% as the office market adjusts to a future without full RTO; Manhattan and Miami are among the tightest markets, while Seattle and San Francisco remain more than 26% vacant (GlobeSt)

Insight: The vacancy metrics here don’t tell the full picture, as it is a lagging indicator of office health. Thanks to the AI boom, firms such as Amazon, Google and OpenAI have recently signed major leases that won’t show up in occupancy data until they move in.

NYC office-to-residential conversions surge as new incentives and zoning changes unlock larger Midtown projects – Developers use structural hacks to repurpose deep office floors as Manhattan’s high rents support a growing national pipeline (WSJ)

U.S. manufacturing contracts for a ninth straight month as tariffs raise material costs – ISM’s PMI slips to 48.2 in November and signals broad weakness across textiles, chemicals and transportation equipment (WSJ)

U.S. industrial construction averaged 71M SF per quarter in 2025 – Softer speculative deliveries and a seven-year-low pipeline kept vacancy flat and signaled an approaching peak (CushmanWakefield)

Five U.S. industrial markets logged 10M+ SF of absorption over the past year – Dallas/Ft. Worth, Phoenix, Savannah, Houston and Kansas City outpaced pre-pandemic norms as demand concentrated in modern post-2020 facilities (CushmanWakefield)

Shallow-bay warehouses ended 2024 with a 4.8% vacancy rate – Big-box warehouses saw vacancy climb to 10.8% as new supply flooded the market and demand concentrated in smaller multitenant spaces (CushmanWakefield)

3PL leasing hit 163M SF in 2024, up 5.2% – Activity accounted for 29% of all U.S. leasing as Asian 3PLs expanded networks and domestic reshoring drove demand (CushmanWakefield)

Industrial CRE loan spreads tightened to 148.89 bps in November – Trepp data shows low-leverage industrial spreads compressing by roughly 2 bps per month in 2025, signaling rising lender appetite despite limited room for further margin compression (Trepp)

Big-box industrial strength concentrates in Oklahoma City, Nashville, Richmond and Columbus – These metros lead national performance rankings as leasing velocity, absorption and demand outpace other U.S. logistics hubs (CoStar)

Ares launches Marq to unify its global logistics real estate platform – The new brand oversees 2,000 properties totaling 600M SF as Ares integrates GLP Capital Partners’ portfolio and expands through major U.S. industrial acquisitions (Bisnow)

U.S. Cyber Monday online sales hit $9.1B by early evening – Adobe says spending is up 4.5% YoY and is on track to finish the day between $13.9B and $14.2B (Reuters)

Turkey Wednesday grocery visits jumped 5.8% YoY – Foot traffic surged 82.6% above normal as traditional supermarkets led the spike and value chains captured early-week deal seekers (Placer.ai)

OpenAI faces a $200B funding gap for its data center buildout – HSBC says cumulative cloud and hardware commitments exceed $1.8T through 2033 and leave liquidity strained despite major deals with Microsoft, Amazon, Oracle and SoftBank (Bisnow)

Data center development races ahead despite mounting insurance strain – Megacampuses in storm-prone regions are pushing project values into the tens of billions, stretching insurers and driving up premiums as developers prioritize power access over underwriting risk (Bisnow)

Trammell Crow proposes a 12M SF, $21B data center campus in Forsyth, Georgia – The 1,600-acre project would consume 1.5M gallons of cooling water daily and add major tax revenue as Georgia’s data center capacity surges from 1.6 GW in 2021 to 19.6 GW this year (Bisnow)

States push data center developers to pay for new grid upgrades as AI power demand surges – New tariffs in more than 10 states add collateral and minimum-usage requirements, but hyperscalers are willing to pay more to secure faster interconnection timelines (Bisnow)

Insight: This tariff is a data-center-specific electricity rate that forces hyperscalers to post collateral, pay for grid upgrades and absorb most of their contracted demand, reflecting rising political pressure in states like Virginia where rising electricity bills recently became a major governor election issue. For example, Virginia regulators recently approved Dominion’s GS-5 model, which shifts grid-expansion costs to data centers and helps utilities clear interconnection backlogs so power can be delivered faster.

Securitized data center issuance reaches $3.68B YTD in 2025 – Trepp reports multi-billion annual volumes and cap rates stabilizing near 6.5% as colocation data centers gain institutional footing in CRE capital markets (Trepp)

Theme parks boost development spending as attendance declines in a tough consumer climate – Operators invest in new rides and attractions while weather swings, weaker tourism and lower discretionary spending limit visitation and slow per-capita growth (CoStar)

Insight: Travis Kelce recently joined an activist group backing a Six Flags turnaround, but this news suggests that while its merger with Cedar Fair created internal challenges, most of the company’s struggles may reflect broader sector pressure from weaker consumer spending and softer tourism.

Neocloud operator Iren seeks $2B to fund data center expansion – The firm is issuing two near-zero-coupon convertible bonds alongside a private equity raise and buyback of older notes to support its long-term Microsoft capacity deal (Bloomberg)

Fortune International Group and Château Group increase construction financing by $259.3M to $418.3M for their St. Regis oceanfront condo project in Sunny Isles Beach, FL – Bank OZK provided the expanded loan for the two-tower, 62-story development at 18801 Collins Avenue (CommercialObserver)

Pyramid Management Group secures $206.8M in five-year loans for its Crossgates retail properties in Guilderland and Albany, NY – The package includes $193M for Crossgates Mall and $13.8M for Crossgates Commons to support reinvestment (TheRealDeal)

Lions Group NYC secures a $200M construction loan in Jersey City, NJ for its 360-unit Homestead Gateway high-rise – Goldman Sachs provided the financing package for the 34-story Journal Square development at 701 Newark Avenue (TheRealDeal)

Borough Developers secures a $62M construction takeout loan in Brooklyn, NY for its 99-unit Gowanus multifamily tower – MF1 Capital provided the refinancing for the newly completed 11-story The Baltic Canal at 526 Baltic Street (CommercialObserver)

GFP Real Estate and Metro Loft secure an $835M refinance in New York, NY for the 1,320-unit 25 Water Street office-to-resi conversion – Apollo and GIC provided the debt for the newly delivered SoMA redevelopment formerly known as 4 New York Plaza (CommercialObserver)

Nestlé is exploring a sale of Blue Bottle Coffee – The company is moving to exit physical retail as part of a broader portfolio review; a deal is expected to value the chain below its 2017 $700M purchase price (Reuters)

Waterford Hotel Group and Maverick Hotels merge to form a 50-plus U.S. hotel platform – The combined manager spans New England, the Midwest, the Eastern U.S. and the South Central region and will actively pursue new acquisitions, contracts and redevelopment projects (CoStar)

Turnberry Associates and Simon Property Group buy 219K SF Esplanade at Aventura retail complex in Aventura, FL for $131M – Seritage Growth Properties sold the open-air center next to Aventura Mall which will be rebranded Abbey at Aventura (Bloomberg)

Blackstone sells an $800M preferred equity stake in the CityCenter Las Vegas complex to Realty Income – Blackstone Real Estate retains 100% of the common equity in the Aria and Vdara properties operated by MGM Resorts (Bloomberg)

Insight: In this deal, Blackstone is raising $800M of new preferred equity it can return to investors as a distribution while keeping full upside in its CityCenter trophy asset. Realty Income receives a senior position above common equity with a 7.4% priority return that escalates over time, though it does not share in the full upside.

Jay Group buys 97 West Street site in Brooklyn, NY for $130M to build a new residential project – Pearl Realty Management sold the Greenpoint waterfront parcel where Jay Group secured a $320M G4 Capital construction loan for a planned 590-unit development (CommercialObserver)

Amazon buys 168K SF flex industrial property in Pasadena, CA for $78.8M – Alvarez & Marsal Capital Real Estate sold the 2964 Bradley Street asset as Amazon expands its data center and digital infrastructure footprint (CommercialObserver)

Arnet Pharmaceuticals buys three fully leased Broward County warehouses in Davie, FL for $53.1M – Prologis sold the Westport Business Park complex spanning 2501–2555 Davie Road; Arnet lined up a $37M TD Bank loan for the acquisition (TheRealDeal)

FPA Multifamily buys the 398-unit tower at 340 East North Water Street in Chicago, IL for nearly $175M – Crescent Heights sold the multifamily portion of the Streeterville high-rise which includes an assumable $112M Freddie Mac loan (TheRealDeal)

Essex Property Trust buys 250-unit 1250 Lakeside apartments in Sunnyvale, CA for $143.5M – City Developments Limited sold the 2021-built luxury community near major Silicon Valley HQs (ConnectCRE)

Cannon Hill Capital Partners and TriPost Capital Partners form a platform to target distressed office assets in New York, Boston and Washington, DC – The partners plan to deploy up to $1.5B across acquisitions, NPLs and rescue capital (CommercialObserver)

Fed warns that community and regional banks face rising CRE refinancing risk – Supervisors flagged elevated rates, tighter underwriting and falling property values as key pressures while noting large banks maintain strong capital under stress tests (Bloomberg)

Texas CRE distress surges to $911M for December’s foreclosure sale – Roddy’s data shows $659M tied to multifamily loans as Houston, San Antonio, Austin, Dallas and Fort Worth properties head to auction amid rising defaults (TheRealDeal)

PE-backed Genesis HealthCare picks an insider bid in bankruptcy to keep control of its 175 nursing homes – The Pima Capital affiliate is offering $40M in cash and will assume key debts (Reuters)