Key Insights

Flat wholesale prices and looming tariffs add uncertainty to inflation and trade policy. February’s Producer Price Index showed no monthly increase, easing immediate inflation concerns, but Trump’s threat of 200% tariffs on EU alcohol in retaliation for the EU’s planned whiskey duties raises risks of escalating trade costs. These developments could pressure commercial tenants reliant on global supply chains and complicate the Fed’s inflation trajectory

Consumer weakness persists among lower-income households, impacting retail and real estate demand. Dollar General beat Q4 earnings expectations but issued a weak 2025 forecast, citing reduced spending from its core consumers earning under $50K annually. This signals ongoing financial strain on budget-conscious shoppers, which could weigh on demand for lower-tier retail assets and workforce housing

Real estate consolidation accelerates as firms seek scale and efficiency. EQT and Zayo’s $8.5B acquisition of Crown Castle’s fiber and small cells business strengthens their market positions by absorbing key assets from a struggling competitor. Meanwhile, Compass is in talks to acquire Berkshire Hathaway’s HomeServices division, and Rocket Companies’ recent planned acquisition of Redfin highlights increasing consolidation in real estate and mortgage sectors as firms seek to expand their platforms amid a challenging housing market

This Week in Real Estate: Key Events & Data

Quick Markets

30Y Mortgage: 6.82%
10Y Treasury Yield: 4.29% (-3 bps)
FTSE NAREIT Index: 757.83 (-1.88%)
30-day SOFR Average: 4.32%

Market Pulse

Wholesale prices remained flat in February, easing immediate inflation concerns, but escalating trade tensions, including Trump’s threat of 200% tariffs on EU alcohol and the EU’s planned 50% tariff on U.S. whiskey, along with the risk of government layoffs, could undermine economic stability despite a resilient labor market

Wholesale Prices Flat in February – Producer Price Index showed no monthly gain, with core PPI down 0.1%, easing inflation concerns amid tariff uncertainty (CNBC)

Trump Threatens 200% Tariffs on EU Alcohol – Retaliation for EU’s planned 50% tariff on U.S. whiskey starting April 1 amid escalating trade war (Reuters)

U.S. Jobless Claims Fall to 220K – Labor market remains stable, but government layoffs and trade war escalation pose risks to job growth (Reuters)

Policy & Industry Shifts

Trump Halts $1B Affordable Housing Retrofit Program – Move threatens upgrades for 25K low-income units as HUD funding cuts take effect (AP)

Residential

Residential

Homebuyer activity is increasing as mortgage rates decline, with applications up 7% and home tours reaching their highest level this year, yet weak pending sales and a 6.9% annual drop in new home mortgage applications signal ongoing affordability challenges, while D.C.'s weakening housing market—driven by rising inventory and federal layoffs—contrasts with Manhattan’s record-high median rent of $4,500 amid tight supply and high mortgage rates

Homebuyer Activity Rises as Rates Decline – Mortgage applications jumped 7%, and home tours hit their highest level this year, but pending sales remain weak (Redfin)

New Home Mortgage Applications Drop 6.9% YoY – February applications declined annually but rose 0.3% from January, with FHA loans hitting a record share as first-time buyers remained active (MBA)

D.C. Housing Market Weakens as Inventory Rises — Active listings are up 56% YoY amid slowing buyer activity and federal layoffs, while listing prices fell 1.6% (Bloomberg)

Manhattan Rents Hit Record High – Median rent reached $4,500 in February, up 6.4% YoY, as tight inventory and high mortgage rates keep demand elevated. (Bisnow)

Homebuilders Unite to Speed Up LA Wildfire Rebuild — Brookfield, Lennar, and Toll Brothers partner to cut costs and streamline reconstruction (Bloomberg)

Market Mix

Tampa Bay Rays Scrap $1.3B Stadium Plan – Citing hurricane damage and funding delays, the team shifts to Steinbrenner Field for 2025 (Bisnow)

Data Center Rents Surge as Vacancy Hits Record Low – Colocation rents rose 12% YoY in 2024, with tenants facing up to 50% increases as supply struggles to keep pace with demand. (Bisnow)

Earnings

Dollar General’s weak 2025 forecast, driven by reduced spending from lower-income consumers earning under $50K annually, signals growing financial strain on budget-conscious households, which could dampen demand for workforce housing and exacerbate retail real estate challenges in lower-income markets

Dollar General beat Q4 earnings and revenue expectations but issued a weak 2025 forecast, citing reduced spending from its core lower-income consumers (earning under $50K annually) amid high inflation and economic uncertainty (Reuters)

Financings

Arbor Realty Trust Secures $1.15B Refinancing from JPMorgan – Repo line funds CLO bondholder payouts, adding $80M liquidity amid delinquency issues (TheRealDeal)

TM Real Estate Secures $54M Loan for Boynton Beach Project – 250-unit complex moves forward amid South Florida’s multifamily supply overhang (TheRealDeal)

M&A

EQT’s fiber acquisition and Compass’s bid for HomeServices signal accelerating industry consolidation, reflecting a push for scale amid rising costs and competitive pressures that could reshape real estate services and infrastructure

EQT, Zayo Acquire Crown Castle’s Fiber Business for $8.5B – EQT buys small cells unit for $4.25B, while Zayo adds 90K fiber route miles (Bloomberg)

Miami Luxury Hotel Seeks $325M Sale — Owners Trinity Investments and Certares are exploring a $325M sale of East Miami, a 352-room Brickell hotel (Bloomberg)

BlackChamber Buys NoVA Data Center Site for $190M – The firm expands its $1.2B data center push with a 65-acre Manassas acquisition (CommercialObserver)

Compass in Talks to Acquire Berkshire’s HomeServices – The top US brokerage is seeking to acquire Berkshire Hathaway’s property brokerage amid industry consolidation (WSJ)

Foothill-De Anza Buys 94-Unit Cupertino, CA Complex for $67M – District opts to purchase rather than build student housing (TheRealDeal)

$60M Condo Sale Sets Downtown Manhattan Record – A duplex at 150 Charles Street sold off-market for $60M as demand for luxury West Village properties surges (WSJ)

Institutional Fundraising

$255M Multifamily Development Fund – Thompson Thrift raises $255M for seven Class A projects amid low construction levels. (PRNewswire)

Distress Watch

RXR & SL Green Modify $940M Worldwide Plaza Loan – Workout deal allows reserve funds to cover expenses after major tenant exit triggered financial strain (TheRealDeal)

Trinity Investments Acquires Hilton Atlanta in Foreclosure – Trinity acquired the 1,249-room convention hotel for $191M after Axonic Capital foreclosed on its $218.8M loan (CoStar)