The Brick Breakdown

Hello Brick Brief readers, 

Thank you for your continued support! Today’s key themes: the Fed remains divided on rate cuts, the housing market is showing fresh signs of strain, and big companies are pushing the office market more firmly toward in-person work.

📉 Fed Outlook Shifts Amid Mixed Signals
Stronger-than-expected retail sales and jobless claims give the Fed reason to hold off on rate cuts, reinforcing concerns that tariff-driven inflation could linger. While the Fed’s Waller and Daly support cuts to protect a softening labor market, others like Kugler warn that easing too soon risks unanchoring inflation expectations.

🏠 Residential Market Shows Signs of Strain
Builder sentiment ticked up after recent tax relief, but buyer traffic remains weak, forcing many to cut prices. Inventory is at a six-year high with growing concessions in rentals, signaling that buyers and renters are regaining leverage in a softening housing market.

🏢 Office Market Reorients Toward In-Person Work
More Fortune 100 firms are mandating full office returns, accelerating the retreat from hybrid policies seen over the past year. Demand is being led by Finance, Insurance, and Real Estate sector tenants, with suburban offices outperforming central business districts on preleasing as the construction pipeline continues to deliver through 2026.

This Week in Real Estate: Key Events & Data

Quick Markets

30Y Mortgage: 6.82% (-1 bps) 

10Y Treasury Yield: 4.45% (-1 bps)

WSJ Prime Rate: 7.50%

FTSE NAREIT Index: 767.34 (0.97%)

30-day SOFR Average: 4.35%

Market Pulse & Rate Watch

Retail strength and mixed Fed commentary reflect a divided outlook, as solid June data gives cover to delay cuts while labor market concerns keep dovish voices active

Retail sales and jobless claims beat expectations in June – Stronger consumer data gives Fed cover to delay rate cuts amid tariff-driven inflation risks (Reuters)

Jobless claims fall to 221K – Weekly filings drop more than expected, but continuing claims rise slightly to 1.96M, reflecting longer job searches amid slower hiring (WSJ)

Fed’s Waller urges July rate cut to protect softening labor market – Inflation risks are limited and waiting could endanger employment stability (Bloomberg)

Fed’s Daly sees two rate cuts as reasonable in 2025 – Says tariffs pose limited inflation risk and warns against overtightening that harms jobs (Reuters)

Fed’s Kugler warns against premature cuts as tariffs lift inflation – Says tight policy is needed to anchor expectations and avoid persistent price pressures (Reuters)

Brick by Brick: URW Nears $925M CMBS Refi for Flagship LA Century City Mall

Unibail-Rodamco-Westfield is finalizing a $925 million CMBS refinancing for its high-performing Westfield Century City mall, as it doubles down on top-tier U.S. retail assets.

• The 1.4M-sf Los Angeles shopping center is expected to close a five-year, $925M CMBS loan on July 22, replacing a 2023 debt package of the same size
• Bank of America, Goldman Sachs, Morgan Stanley, Santander, and a Deutsche Bank affiliate are co-originating the loan, with Fitch Ratings confirming a 45.3% loan-to-value ratio based on a $2B appraisal
• Century City is 95.6% leased with over 250 tenants, anchored by Bloomingdale’s, Macy’s, and Nordstrom, and supported by luxury retailers like Tiffany & Co., Moncler, and Tesla
• A $1B redevelopment completed in 2017 added major lifestyle amenities, including an AMC theater, Equinox gym, Eataly, and a UCLA Health clinic, transforming the property into a multi-use destination
• Located near Beverly Hills and West Hollywood, the mall attracts a high-spending demographic and reported tenant sales near $1B in recent years, with Bloomingdale’s alone generating over $112M
• The refinancing aligns with URW’s U.S. strategy shift: selling underperforming malls like Santa Anita and Mission Valley to retain a leaner portfolio of high-traffic, high-margin assets
• CEO Jean-Marie Tritant has emphasized that URW is focused on value creation from its strongest U.S. properties, and Century City is the clearest example of that pivot

Takeaway: Westfield Century City continues to deliver strong returns through prime location, a curated tenant mix, and lifestyle upgrades that drive foot traffic and sales. URW’s $925M refinancing signals its confidence in the asset’s long-term value and its strategy of consolidating around only the highest-performing U.S. malls.

Policy & Industry Shifts

Trump’s new tax law reshapes Opportunity Zones to favor rural areas – Bigger breaks aim to spur investment, but experts say structural challenges remain (WSJ)

States mandate fee disclosure for rentals – Landlords face rising pressure to list all costs upfront, prompting pushback over compliance burdens and legal exposure (Bisnow)

Residential

​​High rates continue to weigh on housing as builders cut prices, inventory rises, and rent concessions hit records, signaling mounting pressure across for-sale and rental markets

Builder confidence rose slightly in July after tax relief from the budget bill – 38% of builders still cut prices as high rates kept buyer traffic at a 2-year low (NAHB)

Housing market nears balance as inventory hits 6-year high – Active listings rose 17% YoY in June with record price cuts, giving buyers more leverage (Zillow)

Asking price growth slows to 2025 low at 2.9% YoY – Monthly mortgage payments hit 4-month low as buyers gain leverage in softening market (Redfin)

Zillow fights Compass lawsuit over listing access – Says its 24-hour MLS rule promotes transparency while Compass pushes private marketing control (Bloomberg)

Rental market cools as concessions hit June record – Asking rents rose just 2.9% YoY while 35% of listings offered perks like free rent or parking (Zillow)

Multifamily

Multifamily underwriting metrics improve slightly in Q2 – Cap rates compress as rent growth expectations rise, with value-add sentiment rebounding in coastal markets (CBRE)

Multifamily construction delays drop to 43% in Q2 – Permitting, labor, and financing conditions improve as repricing stabilizes and sentiment turns cautiously optimistic (GlobeSt)

Office

Big companies are driving a return to in-person work, with Finance, Insurance, and Real Estate firms leading demand and suburban offices outperforming central business districts in preleasing

Majority of Fortune 100 now mandate full office return – Hybrid policies fell to 41 firms in Q2 2025, down from 78 a year earlier, marking a clear shift away from flexibility (Bloomberg)

Office pipeline 58.9% preleased as Finance, Insurance, and Real Estate firms drive demand – 21.6M SF under construction across top markets, led by Dallas-Fort Worth (Colliers)
Suburban offices see stronger preleasing than Central Business Districts – Suburban projects are 72.2% preleased vs. 48.9% in city centers, with most deliveries due by 2026 (Colliers)

Boston office stabilizes, lab market deteriorates further – Office vacancies fell to 21.2% in Q2 with 132K SF of positive absorption, while lab vacancies hit 35.6% amid declining rents and weak VC funding (Bisnow)

Industrial

Industrial deals stay strong as sector outperforms broader CRE – Marcus & Millichap sees long-term demand resilience despite tariffs, vacancy shifts, and cooling development (GlobeSt)

Inland Empire industrial rents fall for 8th straight quarter to $1.07/SF – CBRE cites tariff uncertainty, rising vacancies, and sublease pressure despite strong leasing and new development (CommercialObserver)

Leasing

JBS Logistics leases 1.28M SF warehouse in Columbus, OH – The deal at 70 East Logistics Park marks the metro’s largest industrial lease of 2025 and reflects strong regional demand for logistics space (CoStar)

Market Mix

Retail

Retail sales rose in June, but slowing volume growth and weak foot traffic across key categories signal mounting pressure beneath headline consumer strength

Retail sales up 3.7% YoY in June – Resilient consumer spending persists, but volume growth slows and economic headwinds loom (Colliers)

Home categories show signs of fatigue – Furniture and home improvement traffic falls despite modest sales gains, with lower in-store engagement (Colliers)

Clothing and electronics see modest lift – Sales rise on summer promotions, but foot traffic remains nearly flat YoY (Colliers)

Department store and entertainment traffic declines – Store closures and shifting preferences hurt visits, while dwell time at venues remains strong (Colliers)

McDonald’s traffic jumps 15% as Snack Wrap returns – Nostalgia-driven menu play boosts foot traffic after recent sales stagnation (Placer.ai)

Hospitality

Hotel openings surge in H1 2025 – 377 U.S. hotels opened totaling 41K rooms, up 30% YoY, led by upper-midscale brands and major launches in California and Orlando (CoStar)

Branded hotels now lead in permanent closures – 55% of U.S. hotel closures through May 2025 involved branded properties, reversing a decades-long trend (CoStar)

Insight: The hotel sector is cycling through properties more quickly as brands shift their focus. Older hotels, often in weaker markets or with high upkeep costs, are being closed. At the same time, new openings are concentrated in high-demand areas like California and Orlando, with an emphasis on upper-midscale segments. This reflects a move to streamline operations and capture more stable, travel-driven revenue.

Earnings & Real Estate Impact

SL Green’s strong Q2 leasing and raised guidance suggest that high-quality office space in Manhattan continues to attract steady demand, signaling a firmer recovery than many expected

SL Green beat Q2 FFO estimates with $1.63 per share as leasing momentum held steady despite market volatility. Occupancy hit 91.4% with 542K SF leased, and the REIT maintained full-year guidance with projected year-end occupancy of 93.2% (CommercialObserver)

United Airlines beat Q2 earnings and reported that travel demand is picking up after a rocky start marked by weak domestic bookings and falling fares. The airline lowered its full-year forecast to $9 to $11 per share but expects a strong finish as economic conditions stabilize (CNBC)

Insight: Rising travel demand is positive for hotels and hospitality, especially in top domestic markets hit by early-year weakness. As airlines like United see bookings rebound, hotels may benefit from stronger occupancy and pricing through the back half of 2025.

Financings

REITs raised $22.5B in Q2 2025 with $16.3B from debt offerings – Nareit data shows unsecured debt remains REITs’ primary funding source, with average yield at 5.5% (ConnectCRE)

Refinancings

Prime Residential refinances Vallejo, CA multifamily complex with $91M Freddie Mac loan – Walker & Dunlop arranged fixed-rate, 10-year interest-only debt for 560-unit Blue Rock Village (ConnectCRE)

TradeLane refinances Chicago-Cincinnati industrial portfolio with $64M loan – JLL arranged five-year floating-rate debt on 13 fully leased light industrial assets totaling 1.1M SF (ConnectCRE)

Structured Finance

Unibail-Rodamco-Westfield to refinance LA’s Westfield Century City mall with $925M CMBS loan – Bank of America, Goldman Sachs, and others set to provide five-year debt on 1.4M sf flagship property (TheRealDeal)

Grand Street Guild secures $105M in city bonds for NYC senior housing project – 191-unit Ridge Street Apartments on Broome Street will serve low-income and formerly homeless seniors (TheRealDeal)

M&A

Building & Portfolio M&A

Healthcare

Jonathan Rose Companies buys Tustin senior housing complex in Orange County, CA for $83M from Meta Housing – 240-unit Coventry Court includes 55+ affordable and market-rate units (TheRealDeal)

Multifamily

Far West sells LA multifamily complex in Marina del Rey for $62M to undisclosed buyer – 198-unit waterfront asset includes ground lease and $7M anchorage improvement clause (TheRealDeal)

Office

Dominus and Meneses acquire Houston office campus from Hertz for $58M – Local buyers snapped up the 806K SF Brookhollow Central at a discount amid court-ordered divestment and distress (TheRealDeal)

Institutional Fundraising

SL Green raises over $1B for NYC debt fund – New capital from pensions and HNW platforms will target office and retail loans amid capital market dislocation (CommercialObserver)

Distress Watch

Foreclosures rise in H1 2025 as financial stress builds – U.S. foreclosure filings hit 187,659, up 6% from last year, with starts rising 7% and REOs up 12% amid falling completion timelines (ATTOM)

CIM Group buys NYC Williamsburg mixed-use portfolio out of bankruptcy for $56M – Deal includes 100K sf of mixed-use space from Leny Group across six buildings (CommercialObserver)

Proptech & Innovation

Figure, a blockchain-based home loan firm, plans fall IPO – Company aims to raise $5B–$10B amid surging HELOC demand and new $200M joint venture with Sixth Street (HousingWire)

Insight: Figure is using blockchain to simplify home equity lending by replacing manual steps with digital processes. Loan data is stored in a secure, trackable system, and key tasks like payments and servicing are handled automatically. This helps Figure issue HELOCs faster and at lower cost, making the product more attractive to both homeowners and investors.