Hello Brick Brief readers, 

Thank you for your continued support! Today’s key themes are a gap between bank and Fed rate cut projections, falling mortgage rates boosting refinancings without lifting sales, and a weakening outlook for hotels. 

🏦 Rate Path Uncertainty
Fed officials remain cautious on easing with Bostic seeing only one cut this year and Goolsbee wanting more proof of cooling inflation and labor before backing policy changes. On the other hand, banks like Goldman and Nomura expect a faster pace with projections ranging from three cuts this year to a September move followed by additional reductions in December and March.

🏠 Refis Climb but Prices Block Buyers
A sharp drop in 30-year mortgage rates is fueling a wave of refinancings without lifting homebuying demand as high prices continue to sideline buyers. Affordability pressures are so severe that 22% of buyers are willing to compromise on personal safety to secure a home.

🏨 Hotels Face a Tougher Road
The hotel industry is bracing for weaker growth as slower GDP and persistent inflation and rising costs threaten margins through 2026. RevPAR declines are spreading across most U.S. markets with luxury hotels the only segment avoiding broad occupancy and revenue losses.

30Y Mortgage: 6.53% (-5 bps) 

10Y Treasury Yield: 4.24% (-6 bps)

WSJ Prime Rate: 7.50%

FTSE NAREIT Index: 759.43 (+0.84%) 

30-day SOFR Average: 4.34%

Fed officials are signaling a cautious approach with at most one cut this year while major banks expect a faster pace of easing that could lower rates by up to 75 bps before year-end

Fed’s Bostic holds to single 2025 rate cut – Fed officials remain split after weak July jobs report, with some urging caution and others open to easing (Bloomberg)

Fed’s Goolsbee keeps fall rate cut on table – Chicago Fed president wants more proof on inflation and labor cooling before backing policy easing (Reuters)

Fed’s Barkin sees policy path unclear – Richmond Fed president cites improving visibility but mixed risks between inflation and jobs ahead of September meeting (Bloomberg)

Goldman sees five Fed cuts by 2026 – Forecast calls for three 25-bp cuts in 2025 and two in 2026, bringing rates to 3–3.25% (Reuters)

Nomura calls September Fed cut – Forecast sees 25-bp reduction next month, followed by cuts in December and March as inflation eases (Reuters)

Consumer spending growth slows to 2.1% – Rising delinquency rates signal caution, though household balance sheets remain relatively healthy (CoStar)

Insight: There is a sharp gap between the Fed’s cautious stance and the aggressive rate cut forecasts from banks and markets. The Fed wants more time to confirm tariffs are not fueling inflation, while markets are betting on multiple cuts this year. Traders clearly see little risk of tariffs pushing prices higher and expect consumers to avoid most of the extra 10+% costs paid by importers. In particular, Goldman’s call for three rate cuts in 2025 sits at odds with its own chief economist’s view that consumers will absorb 67% of tariff costs by year-end.

TPG has expanded its real estate footprint with two notable moves: the purchase of adjacent Park Avenue South office towers in Manhattan and the pending $156.2M acquisition of a 13-property industrial portfolio in Goodlettsville, Tennessee, financed through CMBS debt. The firm deployed $1.53B in real estate during Q2 and has $12.78B in dry powder.

• The Park Avenue South deal includes two high-quality towers that occupy a full block in Gramercy Park, a submarket where leasing surged more than 60% in 2024 and rose nearly 50% in early 2025
• TPG also recapitalized 225 Park Avenue South earlier this year, reinforcing its focus on this corridor of Manhattan
• The Goodlettsville industrial portfolio spans 13 assets and is anchored by a 252,000-square-foot warehouse at 501–550 Space Park North positioned on the I-65 corridor built in 1979
• Goodlettsville’s location provides direct access to Nashville’s regional distribution network, aligning with portfolio strategies built on strong logistics connectivity

Takeaway: TPG’s latest acquisitions point to a deliberate focus on submarkets with proven rent growth and stable occupancy. The combination of prime Manhattan office space and strategically located Nashville industrial assets reflects a strategy built on acquiring properties already demonstrating strong performance within their respective markets.

Falling mortgage rates are driving more refinancings but high prices and locked-in low-rate inventory continue to limit sales, pushing some buyers to accept lower safety standards to secure a home.

30-year mortgage rate drops to 6.67% – Largest decline since February sparks 23% refi surge, but homebuying demand remains weak amid high prices (Bloomberg)

Older homeowners shift to renting – Rising property taxes, insurance, and repairs are prompting more Americans 55+ to rent instead of own (WSJ)

22% of buyers willing to compromise safety to buy a home – Survey finds affordability pressures pushing some to trade personal security for lower costs (Redfin)

Mansions under $1M still common in four metros – Buffalo, Indianapolis, Cleveland, and Memphis buck national $1.4M median with sub-$1M luxury homes (Redfin)

81% of mortgage debt under 6% – Low locked-in rates keep inventory tight, sustaining price pressure despite high-rate buying activity (Realtor.com)

Home values rise in half of Opportunity Zones – ATTOM reports Q2 prices increased in 50.5% of federally designated areas, though growth trailed non-zone markets and remained weakest in low-priced neighborhoods (Homes.com)

U.S. apartment construction hits decade low – 542.8K units underway in Q2 2025, down 37% YoY from 2024 peak, with largest declines in Austin, Phoenix, Atlanta, Dallas, and New York as permitting slows and completions accelerate (RealPage)

Office expansion plans hit 5-year high – 67% of occupiers expect to maintain or grow space, driven by small-company leasing and prime-location demand (Bisnow)

JCP&L renews 70K-SF office lease at Bell Works in Holmdel, NJ – Electric utility extends headquarters presence in 2M-SF complex, adding storage space to total footprint (CommercialObserver)

Industrious signs 22K-SF office lease at 1900 Broadway in New York, NY – Coworking firm takes seventh floor in Upper West Side building for 10 years (CommercialObserver)

U.S. mega industrial leases fall 58% in H1 2025 – 13 deals over 1M SF vs. 31 last year, led by Inland Empire with 9.8M SF (GlobeSt)

GE Appliances to invest $3B in U.S. plants – Expansion across five states will reshore production from China and Mexico, add 1,000 jobs (WSJ)

U.S. imports may have peaked in July – Port of LA volumes hit record as retailers front-load holiday goods to avoid potential tariffs (Reuters)

TricorBraun leases 608K SF warehouse in Fairfield, CA – Largest North Bay industrial deal in years amid slowing leasing demand (CoStar)

Private investors lead $96.9B Q2 CRE investment – $60B deployed as industrial and office volumes rise while multifamily slips 19% YoY to $32.9B (GlobeSt)

Hotel sector outlook dims nationwide – CBRE lowers 2025 GDP forecast to 1.5% and projects higher-for-longer inflation, with stagnant revenue growth and rising costs expected to pressure hotel margins through 2026 (CBRE)

RevPAR declines widen across U.S. hotel markets – Only 35% of markets saw growth in June as inbound travel fell 3.4% and occupancy slipped, with luxury hotels the only segment posting RevPAR gains (CBRE)

Lollapalooza boosts Chicago tourism – Festival drives 181% jump in domestic visitors, led by affluent regional travelers from 50–100 miles away (Placer.ai)

Google to invest $9B on AI and cloud infrastructure in Oklahoma on– Expansion includes new Stillwater data center, Pryor facility upgrades, and $1B AI education push (Reuters)

Goldman prices $1.4B loan for Hyatt sale – Financing backs $2B deal for 15 Caribbean and Mexico resorts sold to KSL Capital and Rodina JV, Tortuga Resorts (Bloomberg)

Dwight Mortgage Trust provides $155M refinancing to Beitel Group for Bronx, NY multifamily – Bridge loan retires construction debt on 405-unit mixed-income project (CommercialObserver)

Fortress Investment Group provides $59M refinancing for Hampton, VA multifamily – Madison International Realty and The Accend Companies refinance 287-unit Ellipse Urban Apartments (CommercialObserver)

Wells Fargo provides $120M CMBS refinancing to Vornado Realty Trust for NYC shopping center – 10-year fixed-rate loan replaces 2018 debt on Whole Foods–anchored property (CommercialObserver)

FAVO Capital buys $190M multifamily and retail asset in Hollywood, FL – 277-unit 1818 Park with 24K SF retail acquired from GCF Development, which gained an equity stake in FAVO (CommercialObserver)

Terreno Realty acquires nine industrial distribution buildings in Woodinville, WA for $232.6M – Assets total 720K SF across 42.8 acres, 91% leased to 26 tenants (GlobeSt)

TPG Real Estate acquires $156.2M industrial portfolio in Goodlettsville, TN – 13-property deal targets strong leasing demand in Nashville suburb (CoStar)

Abacus Capital buys $98M multifamily asset in Concord, CA – Park Central Apartments acquired in East Bay’s largest apartment sale in years amid rent recovery (CoStar)

First Citizens Bank buys $82M office in Palo Alto, CA – 38K SF 250 University Ave property with ground-floor retail was acquired from Inspire Real Estate Holdings (TheRealDeal)

ACORE Capital files $187M foreclosure on Chicago hotels – SB Yen’s South Loop Best Western and Homewood Suites face lender action amid alleged revenue diversion and investor lawsuits (TheRealDeal)

Cushman & Wakefield develops Athena data-visualization platform – Internal tool integrates parcel, power, fiber, and environmental data to guide property strategy, starting with data centers (GlobeSt)