The Brick Breakdown

Hello Brick Brief readers, 

Thank you for your continued support! Today, we’re tracking ongoing trade uncertainty weighing on the economic outlook, a housing market divided between builders and homeowners, and steady demand for high-quality office space amid broader caution. 

Stay tuned for our breakdown later today on the growing divergence between April’s new and existing home sales.

🇺🇸 Tariff Uncertainty Clouds Economic Outlook
Trump threatened to enact a 50% tariff on EU goods before agreeing to delay action until July 9, offering temporary relief as trade talks continue. Still, rising import costs and deficit concerns tied to his $3.8 trillion tax plan pushed the dollar lower for a third straight day, signaling renewed market volatility.

🏠 Housing Market Splits as Builders Adapt and Buyers Downsize
New-home sales surged 11% in April as builders responded to affordability pressure with incentives and smaller designs, even as 7% mortgage rates persisted. Meanwhile, starter homes are shrinking but remain out of reach for many, with prices up 44% since 2020 and required incomes nearly doubling.

🏢 Office Market Shows Selective Strength Amid Broader Uncertainty
Manhattan’s office availability dropped to 17.3% in Q1 as trophy and Class A spaces saw strong demand, with tenants locking in long-term leases. At the same time, a growing appetite for subleases reflects tenant caution and a preference for flexible, capital-light occupancy strategies

This Week in Real Estate: Key Events & Data

Quick Markets

30Y Mortgage: 6.97% (+3 bps)
10Y Treasury Yield: 4.49% (-4 bps)
FTSE NAREIT Index: 750.11
30-day SOFR Average: 4.32%

Market Pulse

Continued trade tensions and deficit-driven dollar weakness are increasing market uncertainty, posing risks to CRE refinancing and consumer resilience as the Fed monitors financial stability

Trump extends EU tariff deadline to July 9 after initial 50% threat – After threatening 50% tariffs on $321B in goods, Trump delayed action following a call with EU leaders as talks continue over trade barriers and regulatory disputes (CNBC & Reuters)

Fed’s Cook sees April tariff-driven volatility as stability test – Treasury and corporate debt markets held up despite liquidity drops, though Fed remains watchful of CRE refinancing risks and household debt stress (Reuters)

Dollar weakens as debt fears grow – Greenback falls 0.3% to 142.35 yen and hits a three-day slide on deficit concerns from Trump’s $3.8T tax plan, while the euro nears a one-month high at $1.1399 (Reuters)

Brick by Brick Slide Insurance Files for IPO With Strong Growth and Concentrated Climate Risk

Florida-based Slide Insurance filed to go public and reported $92.5M in Q1 net income and $281.6M in revenue, positioning itself as a high-growth player in catastrophe-prone markets that traditional insurers have exited.

• Founded in 2021 by Bruce and Shannon Lucas, Slide writes policies in Florida and South Carolina, with 99.5% of policies concentrated in Florida as of year-end.

• The company targets high-density coastal zones with limited underwriting capacity and fills a gap left by major carriers who have pulled back due to rising reinsurance costs and climate volatility.

• Slide has delivered rapid growth, doubling its net income year-over-year.

• The firm plans to list on Nasdaq under the ticker SLDE, with Barclays and Morgan Stanley leading the IPO, which includes a partial secondary sale by existing shareholders.

• Competitor American Integrity Insurance, which is also based in Tampa, went public earlier this month and is up 3.4% since its $126.5 million debut.

• Slide’s management owns nearly half the company and has deep industry experience, but investor scrutiny will focus on loss reserves, reinsurance structure, and geographic diversification plans.
  

Takeaway: Slide’s IPO offers exposure to a profitable and fast-growing insurer in a distressed market. The company’s concentrated Florida exposure creates asymmetric risk. While Slide has demonstrated financial strength, including a Demotech Financial Stability Rating of “A” and a $1 billion reinsurance program exceeding regulatory requirements, its resilience in the face of major catastrophes remains a critical consideration. For instance, State Farm faced $7.6 billion in claims from the Palisades fire, highlighting the potential financial impact of large-scale disasters. Investors should weigh Slide's growth prospects against the inherent risks of operating in hurricane-prone regions

Policy & Industry Shifts

Jersey City bans rent-setting algorithms – City Council passes law targeting RealPage and Yardi amid antitrust lawsuits, despite no conclusive findings of collusion (TheRealDeal)

Residential

Despite a rebound in new-home sales, persistent affordability pressures are reshaping the market as buyers downsize, millennials delay ownership, and rentership dominates in high-cost urban hubs

New-home sales jump 11% in April to highest since 2022 – Builder incentives and lower prices offset 7% mortgage rates, though affordability and inventory challenges persist (Bloomberg)

Buyers downsize as affordability worsens – Median new-home size fell 4.7% since 2020 as builders push smaller, lower-cost designs to offset high rates and tariffs (WSJ)

Starter homes shrink but remain out of reach – Median price rose 44% since 2020 to $287K, while required income to buy nearly doubled to $101K as high rates and costs offset smaller sizes (WSJ)

Millennial homeownership lags at 47% as prices and rents rise – Only 33% owned homes by age 30, down from 55% in the 1960s, with more priced out and renting longer in non-metro areas (GlobeSt)

Renter rates top 65% in Miami, NYC, Boston, SF, and LA – High prices and dense layouts drive rentership in these costly, transit-rich metros (Apartments.com)

Office

​​Manhattan’s office market is stabilizing at the top end as tenants commit to Class A space long term, while rising demand for sublets signals continued caution and a shift toward flexible, lower-cost occupancy

Manhattan office availability falls to 17.3% in Q1 – Trophy and Class A leases dominate activity, pushing average lease terms to 118 months as tenants lock in space amid tightening supply (ConnectCRE)

Office sublets gain traction amid economic uncertainty – Manhattan sublet availability dropped from 17.4M to 14.9M SF as tenants seek turnkey, capital-light alternatives to costly buildouts (ConnectCRE)

Industrial

Rising tariffs and shipping costs are straining supply chains, with importers facing record fees and surging container rates that could pressure margins and ripple through industrial leasing demand

U.S. importers paid record $16.5B in April tariffs – New Trump levies drive customs revenue surge, though short of $2B/day goal to offset tax cuts (Bloomberg)

China-US container rates jump after tariff pause – Shanghai to New York rates rose 19% to $4,350, and to LA by 16% to $3,136, driven by Asia demand and tight capacity, per Drewry (FreightWaves)

Market Mix

Regional

Florida insurer Slide Insurance files for IPO with $92.5M Q1 profit – Insurer plans Nasdaq listing under SLDE as it expands in hurricane-prone coastal markets (Bloomberg) 

Construction

New parks spur development in cities like Irvine and Fort Worth – Green space investments attract multifamily growth, with Irvine’s Great Park driving over 470 units and major projects (CoStar)

Retail

Retail demand remains resilient in growth markets and select national chains, suggesting that consumer spending is holding up despite tariff pressures and localized supply constraints

Retail thrives in growth markets despite tariff concerns – Phoenix, Texas, and Denver see strong demand, while LA’s Westside faces restaurant space shortages and permitting delays (TheRealDeal)

Restaurant traffic shifts toward convenience – Nearly 75% of all orders are now drive-thru or takeout, according to the National Restaurant Association (X)

Gap and Ulta traffic rebound in April after weak Q1 – Gap’s Old Navy visits rose 10.2% YoY and Ulta’s overall visits ticked up 0.4%, signaling a potential consumer recovery boosted by tariff-driven demand (Placer.ai)

Hospitality

Prestige restaurants boost high-end hotel performance – Luxury hotels with celebrity or award-winning chefs see 8.8% higher room rates and 18.6% higher RevPAR  (JLL)

Mid-May hotel performance lifted by strong weekend demand – U.S. RevPAR rose 0.9% as Detroit, Chicago, and Charlotte outperformed on events like Automate 2025 and the PGA Championship (CoStar)

Life Sciences

NYC’s life sciences market faces rising vacancy and funding cuts – With 41.8% vacancy and $880M in expected NIH cuts, the city’s lab sector struggles to absorb 1.3M SF under construction amid stalled leasing (Bisnow)

Earnings & Real Estate Impact

Ross Stores’ guidance withdrawal underscores how tariffs are hitting China-dependent retailers hardest, with rising import costs threatening margins and forcing potential price hikes that could weaken budget-conscious demand

Ross Stores’ shares fell ~10% despite beating Q1 earnings and revenue expectations after the company withdrew its guidance for the second quarter. The discount retailer sources over half of its merchandise from China, and potential tariffs could pressure margins. As a result, Ross is considering price increases to help offset rising costs (Reuters)

Financings

Loans

Related secures $231M loan for 46-story Andare Residences in Fort Lauderdale, FL – The Pininfarina-designed condo tower is over 50% presold and rising next to Icon Las Olas (TheRealDeal)

BridgeCity Capital provides $69M construction loan for Chicago resi tower – Financing supports DAC Developments’ 165-unit project at 626 South Wabash in the South Loop (CommercialObserver)

Refinancings

Morgan Stanley provides $270M refi for Mackinac Island, MI hotels – Loan covers Grand Hotel and Bicycle Street Inn, returning $80M to KSL Capital ahead of peak tourist season (CoStar)

M&A

Company M&A

$257M real estate brokerage Douglas Elliman receives takeover bid from Anywhere Real Estate valuing it above $4 per share – Deal follows leadership shakeups and legal fallout from former agents (Bloomberg)

Building & Portfolio M&A

JPMREIT acquires 15 fully leased industrial warehouses across Norfolk, Florida’s Space Coast, and Dallas in a $124M deal – Sellers include B&D Holdings JV (Bisnow)

Park Hotels sells San Francisco’s Hyatt Centric Fisherman’s Wharf for $80M – EOS Investors acquires 316-key property at a 23% discount from 2013 price (ConnectCRE)

Camber Property Group buys Brooklyn multifamily for $72M – Developer acquired 183-unit vacant building from The Jay Group in Cypress Hills (CommercialObserver)

Kohan Retail in talks to buy Chicago office tower for under $70M – 311 South Wacker last sold for $302M, marking a potential 75% drop as office distress deepen (TheRealDeal)

MSI buys City of Industry, CA warehouse for $65M – Taiwan-based MSI acquired the 200K sf property from Link Logistics as industrial users continue buying older assets across Southern California (CommercialObserver)

EQT buys two Broward, FL industrial properties for $55.3M – Deal includes a 158K SF Amazon-leased facility in Deerfield Beach and a fully leased 67.5K SF building in Pompano Beach from Elion Partners (TheRealDeal)

Institutional Fundraising

US investors eye global real estate – CalSTRS and CalPERS are considering shifting capital overseas as deglobalization reshapes domestic investment strategies (PERE)

Proptech & Innovation

AI seen reshaping corporate real estate – Nearly 75% of respondents in a Colliers-CoreNet survey expect AI to have a significant future impact on the industry (IREI)