Hello Brick Brief readers, 

Thank you for your continued support! Today we’re seeing the data center investment boom accelerate across billion-dollar deals, private equity taking Denny’s private, and core real estate funds delivering steady Q3 gains.

🍰 Core Real Estate Returns Stay Positive as Sales Rebound
Core real estate funds posted a 0.73% Q3 return as income growth slowed from Q2’s 1.03% pace. LightBox reported $27B in September CRE transactions, with 70% closing above prior purchase prices as capital targeted retail, multifamily, and industrial assets while office values stayed underwater.

⚡ Data Center Investment Boom Accelerates
The data center market is heating up as capital floods into AI infrastructure from the world’s biggest players. Alphabet raised $25B in bonds to fund up to $93B in AI infrastructure capex, while OpenAI’s $38B Amazon deal, Microsoft’s $9.7B IREN partnership, and Eaton’s $9.5B Boyd Thermal acquisition mark a record wave of data center investment and M&A spanning compute, chips, and cooling.

🍳 Denny’s Goes Private Amid Restaurant Slowdown
Private equity firms are betting they can turn around Denny’s as the restaurant sector struggles with weak traffic. TriArtisan Capital, Treville Capital, and franchisee Yadav Enterprises are taking the chain private in a high-risk turnaround at a time when middle and lower income consumers are cutting back on dining.

30Y Mortgage: 6.34% (+6 bps)

10Y Treasury Yield: 4.11% (+3 bps) 

WSJ Prime Rate: 7.25%

FTSE NAREIT Index: 758.25 

30-day SOFR Average: 4.20%

The Fed remains divided as it balances cooling labor conditions with persistent inflation signals. Lower-income consumers are weakening, yet the broader economy has held steady as tariffs have not raised inflation as much as expected.

U.S. economy shrugs off tariff fears – Growth and inflation remain steadier than expected despite the steepest trade levies in nearly a century, easing recession concerns (WSJ)

U.S. economy faces strain as lower-income consumers weaken – Rising healthcare costs, potential SNAP benefit cuts, and layoffs threaten spending momentum ahead of the holidays, testing Fed optimism (Reuters)

Fed’s Goolsbee is undecided on December rate cut – The Chicago Fed president said inflation remains too high and cautioned against easing policy amid limited data from the government shutdown (Reuters)

Fed’s Cook says December meeting “live” for rate cut – The governor signaled flexibility on policy, citing elevated inflation and cooling labor risks amid limited data from the government shutdown (Reuters)

Fed’s Daly open to December rate cut – The San Francisco Fed president backed the latest cut to 3.75–4% and said another move depends on data as inflation nears 3% and labor conditions cool (Reuters)

Denny’s will be taken private by PE firm TriArtisan Capital Advisors, Treville Capital, and Yadav Enterprises in a transaction that values the restaurant chain at $620M including debt, a 52% premium to its prior close. The deal is expected to close in early 2026 and adds another legacy restaurant brand to TriArtisan’s growing portfolio of casual dining chains.

🧱 Deal Structure and Buyers
TriArtisan, the owner of TGI Fridays, is partnering with Treville Capital and major franchisee Yadav Enterprises to reposition the business and stabilize performance. The group plans to focus on franchise support, menu modernization, and store-level investment while benefiting from the flexibility that comes with private ownership.

🧱 Why Now: Operational Headwinds and Unit Closures
Denny’s has struggled to maintain relevance amid shifting breakfast habits and tougher competition from chains like First Watch. The company planned to close up to 150 underperforming locations through 2025 after years of weak same-store growth and declining in-person traffic. Public markets have grown less patient with slow turnarounds, creating an opening for private equity to attempt a longer-term rebuild.

🧱Private Equity Loves Restaurants
Private equity firms are increasingly targeting restaurant brands with strong name recognition and scalable franchise models. Recent deals include Blackstone’s $8B acquisition of Jersey Mike’s, Roark Capital’s $1B purchase of Dave’s Hot Chicken, and Roark’s $9.6B buyout of Subway. 

🧱 Buyer Precedent: The Hooters Playbook 

This isn't TriArtisan's first restaurant turnaround. The firm previously acquired Hooters of America in July 2019, which filed for bankruptcy earlier this year. Hooters’ founders recently reacquired the brand and will take control of 140 U.S. locations, simplify menus, and restore the chain’s 1980s “beachy” aesthetic to hopefully revive the struggling franchise

🧱 Macro Context: Spending Fatigue Hits Value Dining
This take-private is a bold bet by sponsors that they can reverse Denny’s poor performance at a time when value-focused restaurants are losing momentum. Middle-income consumers are cutting back as Wingstop’s same-store traffic fell 8.8% and Chipotle forecast single-digit sales declines for 2025. Reuters reports that rising healthcare costs, SNAP benefit reductions, and layoffs are also straining lower-income households, reducing discretionary spending across dining and travel. Higher-end chains like Shake Shack, which saw only a 1% same-store decline, are holding steadier as higher-income consumers remain more insulated from the slowdown.

Takeaway: The Denny’s take-private is a wager that private ownership can deliver a turnaround even as value dining faces mounting pressure. The sponsors are betting that focused investment, operational control, and a long-term horizon can restore growth in a segment where public markets have lost patience and consumer headwinds are intensifying. 

NCREIF core real estate funds post 0.73% Q3 return – Performance remains positive but has moderated from 1.03% in Q2 as income growth slows (IREI)

LightBox reports 70% of September CRE sales closed above prior purchase prices – Transactions reached a 2025 high of $27B as capital flowed to retail, multifamily, and industrial assets while office values stayed under pressure (ConnectCRE)

Insight: MSCI’s September index reported that CBD office values are up 5.1% YoY and suburban offices are up 4.5%. LightBox’s data, however, suggest many of these same properties are still worth less (often much less) than what their current owners paid, showing that prices are gaining momentum but remain below pre-pandemic levels. Despite some RTO and AI-driven office gains, it remains to be seen whether office values can return to prior levels given the normalization of hybrid work and the decreased need for space.

CRED iQ reports average CRE interest rate of 6.57% and cap rate of 6.34% – Narrow spreads reflect elevated borrowing costs and compressed yields; hospitality shows the widest margin, while industrial assets have the thinnest (CommercialObserver)

Adjustable-rate mortgages are making a comeback – Buyers facing high housing costs are turning to ARMs to lower initial payments, risking higher costs later if rates rise (WSJ)

Insight: Adjustable-rate mortgages are appealing because markets expect the Fed to keep cutting rates, even if the timeline remains uncertain amid its balancing of stubborn inflation and a cooling labor market labor. That being said, these homeowners could get burned if inflation unexpectedly surges and forces the Fed to tighten again, pushing their payments higher.

New apartments command 6% national rent premium – Lease-up units average $1,982 per month versus $1,871 for stabilized assets, with premiums reaching 20–30% in top markets like D.C., Chicago, and Dallas (RealPage)

CoStar projects 10M SF of office absorption through 2026 – Demand will be led by New York, Dallas, and Charlotte, where return-to-office trends and financial sector hiring remain strongest (CommercialObserver)

Manhattan office availability drops to lowest level since 2020 – Colliers reports 3.6M SF of October leasing as major deals from Stripe, Harvey AI, and Scale AI push inventory and sublease supply below pre-pandemic levels (CommercialObserver)

OpenAI plans up to 500K SF expansion in Silicon Valley – The ChatGPT maker is scouting offices in Mountain View after adding more than 800K SF in San Francisco’s Mission Bay (TheRealDeal)

U.S. manufacturing contracts for eighth straight month – ISM PMI fell to 48.7 in October as tariffs disrupted supply chains, dampened orders, and prolonged factory delivery times amid weak export demand (Reuters)

Retail sector faces uncertain holiday season – Strong fundamentals contrast with weakening sentiment as tariffs, layoffs, and slowing spending threaten 2026 leasing and investment momentum (Bisnow)

Jollibee expands U.S. presence with new franchise push – The Filipino fast-food giant is planning hundreds of locations by 2028, targeting California, Texas, Florida, and the Northeast amid strong retail demand and rising franchise competition (CoStar)

Hooters founders reacquire brand after bankruptcy – The original owners will take control of 140 U.S. locations, simplify menus, and restore the chain’s 1980s “beachy” aesthetic to revive the struggling franchise (Bloomberg)

First Watch posts 11.7% YoY visit growth – The breakfast chain’s steady expansion toward 2,200 units and affluent customer base support resilience amid tighter consumer budgets (Placer.ai)

Portillo’s visits rise just 1% YoY – The Midwestern comfort-food chain is slowing after rapid 2024 growth, focusing on value and efficiency to regain momentum in 2026 (Placer.ai)

Sweetgreen traffic climbs 10.1% YoY – The salad chain continues expanding through suburban formats and automation, though growth has moderated from its post-pandemic highs (Placer.ai)

OpenAI signs $38B cloud deal with Amazon – The seven-year agreement deepens OpenAI’s data-center footprint and reduces reliance on Microsoft as Altman targets 1 GW weekly power expansion by 2030 (FT)

Microsoft signs $9.7B cloud deal with IREN – The agreement expands AI data center capacity in North America, giving Microsoft access to Nvidia chips and easing compute shortages amid record AI demand (Reuters)

Microsoft signs multibillion-dollar deal with AI cloud startup Lambda – The partnership will deploy tens of thousands of Nvidia GPUs to expand Microsoft’s AI computing capacity across its cloud network (Reuters)

Surging power costs strain U.S. consumers – Rising data center demand is driving higher electricity prices and fueling local political backlash over energy use and infrastructure (WSJ)

Hotel executives warn of weak inbound tourism – Tariffs, political tensions, and “America First” sentiment have curbed travel from Canada and Asia, raising concerns about World Cup 2026 demand (CoStar)

Alphabet raises $25B in U.S. and European bonds – Proceeds will fund record $91–93B in AI and cloud data center investments amid surging infrastructure demand (Bloomberg)

Bain Capital secures $3.1B private loan to acquire Service Logic – Blackstone, Apollo, and KKR will finance the deal for the largest privately held HVAC and mechanical services provider in the US and Canada (Bloomberg)

Ytech secures $565M construction loan for 1428 Brickell condo tower in Miami, FL – J.P. Morgan provided senior financing and Sculptor Real Estate supplied junior debt for the 70-story, 195-unit project that is 60% presold (CommercialObserver)

Namdar Group secures $460M in bridge and construction loans for 1,400-unit apartment towers in Miami, FL – Slate Property Group’s Scale Lending provided two $230M loans for the two-phase project at 55 NE 2nd St and 50 NE 3rd St designed by Arquitectonica (TheRealDeal)

Oak Row Equities and LNDMRK Development secure $210.5M construction loan for multifamily project in Miami, FL – Bank OZK provided a $142.5M senior loan and Canyon Partners supplied $68M mezzanine financing for the 324-unit tower (ConnectCRE)

Eastern Real Estate and The Kane Company secure $97M construction loan for Prescott Post multifamily project in Portsmouth, NH – Truist Bank provided financing for the 360-unit development at 100 Durgin Lane(CommercialObserver)

Investmates secures $81M construction loan for condo project in Brooklyn, NY – S3 Capital provided financing for the 68-unit development at 19-29 Clay Street in Greenpoint, which will include retail space and community amenities (CommercialObserver)

Hines and Peakline Partners secure $63.5M refinancing for T3 Wedgewood Houston office in Nashville, TN – Blue Owl provided a $46M senior loan and Tishman Speyer supplied $17.5M mezzanine financing for the 197K-SF building anchored by Capitol Christian Music Group (CommercialObserver)

Eaton makes $9.5B data center play with Boyd Thermal acquisition – The power management firm is buying Goldman-backed cooling manufacturer Boyd to expand into liquid cooling as AI data center demand soars (Bloomberg)

TriArtisan Capital, Treville Capital, and Yadav Enterprises to acquire Denny’s in $620M deal – The buyout takes the restaurant chain private amid a wave of PE-backed dining acquisitions (Reuters)

Prologis acquires 11-building industrial portfolio in Brisbane, CA for $316M from CalSTRS – The 1M-SF Crocker Industrial Park purchase marks 2025’s largest Bay Area warehouse deal, driven by AI and e-commerce demand (TheRealDeal)

Eagle Rock raises $607M for Multifamily Fund VI – The firm’s largest fund to date will target value-add apartment acquisitions across the Northeast and Mid-Atlantic regions (IREI)

Judge orders Office Properties Income Trust into mediation – The bankrupt REIT must negotiate with 2027 noteholders owed $400M over a default dispute that could raise interest on notes from 3% to 12% (Bloomberg)