Hello Brick Brief readers, 

Happy Monday. This week’s publishing schedule may be a bit uneven due to a few commitments I have - normal programming returns next week. 

In recent news, BlackRock and Federated Hermes outlined a mixed 2026 CRE outlook, NYC’s rent-stabilized housing faces mounting financial strain, and the industrial market is bifurcated between big-box softness and infill strength

🏦 Where BlackRock And Federated Hermes See Real Estate In 2026
BlackRock is expecting 2026 to serve as a reset year for US CRE activity as lower rates, steadier inflation and renewed capital flows create room for price discovery in multifamily, industrial and data center assets. Federated Hermes sees stronger GDP growth adding to that momentum while higher short-term rates continue to weigh on office and highly levered multifamily owners that rely on refinancing.

🏙️ NYC Rent Stabilized Housing Faces Mounting Stress
NYC enters 2026 with rising distress as regulated rent growth trails insurance and operating costs for apartment owners such as Hungerford and Haruvi, who now face foreclosure risk on aging portfolios. Mayor-elect Mamdani is pursuing both a rent freeze and faster approvals for new construction, which creates a tension as he pushes for additional supply while a rent freeze weakens the incentive to build or maintain those properties.

📦 Industrial Market Bifurcates between Big Box Weakness And Infill Strength
Industrial vacancy surprisingly rose to 9.6% in October even as rents climbed 6% YoY as speculative big box supply outpaced near-term absorption tied to reshoring demand. Sub-100K SF infill warehouses drove the rent gains as last mile demand from tailwinds such as e-commerce growth and zoning constraints keep this segment tight and preserve pricing power.

Trump confirms he has chosen the next Fed chair – He told reporters he expects the nominee to deliver interest-rate cuts and will announce the pick soon (Bloomberg)

Fed independence is a real concern here, but lower interest rates will be supportive for both real estate deals and financing.

BlackRock and Federated Hermes expect 2026 to revive real estate investment activity with stronger capital flows and a firmer economic backdrop. They expect to see a sharper divide between prime sectors that continue to attract funding, while weaker assets will continue to struggle under elevated financing costs

BlackRock sees 2026 as a reset year for U.S. commercial real estate – Lower rates, stabilized inflation and renewed capital flows set the stage for price discovery, with multifamily and industrial among the first sectors to clear and trade again (BlackRock)

BlackRock sees 2026 widening the divide between winning and losing property types – Data centers, logistics and single-family rentals draw global capital while aging office, select Sun Belt multifamily and weaker retail centers face continued repricing and limited debt availability (BlackRock)

BlackRock sees 2026 unlocking a new financing cycle for real estate – Large private credit funds, insurance capital and sovereign wealth dry powder step in as dominant lenders, driving recapitalizations, bridge-to-core strategies and build-to-core development in housing and infrastructure-linked assets (BlackRock)

Federated Hermes sees a stronger 2026 economy creating a firmer bid for real estate risk – Faster nominal GDP growth, rising margins and renewed “animal spirits” could lift REIT earnings and improve capital access across CRE (FederatedHermes)

Federated Hermes sees higher-for-longer short-term rates keeping CRE financing costs elevated – A 3–5% rate floor, even with Fed cuts, points to limited relief for refinancing and continued pressure on highly levered office and multifamily owners (FederatedHermes)

Federated Hermes sees volatile credit markets widening the gap between strong and weak CRE assets – Tariff uncertainty, political risk and tight spreads push lenders toward high-quality properties while challenged assets face scarce liquidity and softer valuations (FederatedHermes)

Twenty states sue the Trump administration over HUD’s homelessness funding changes – They argue the shift away from permanent housing and new political litmus tests unlawfully threaten support for 170,000 people (TheRealDeal)

NYC Mayor-elect Mamdani eyes a rent freeze and faster approvals – Landlords warn rising insurance and maintenance costs leave rent-stabilized buildings fragile while developers push for streamlined permitting and lower operating burdens to revive housing production (CommercialObserver)

Rising home prices and rate volatility pulled buyers back in the four weeks ending Nov. 23 – Mortgage rates hovered just above 6.2% while pending sales posted their biggest drop in eight months even as monthly payments hit a YTD low and search activity ticked up (Redfin)

Inventory continues to rise as demand softens in the week ending Nov. 22 – Active listings climbed 12% YoY while median list prices fell 1.2% and homes spent more time on market, showing buyers gaining leverage even as 6.26% rates keep affordability tight (Realtor.com)

Manufactured housing strengthens U.S. affordability – Lower construction costs and wider distribution give metros with larger mobile-home stocks more capacity to offer entry-level housing as traditional supply remains tight (IREI)

December housing data offers early read on 2026 – HousingWire says mortgage rates near 6% and improving purchase applications will determine whether the market enters next year with stronger demand as inventory normalizes and seasonal trends firm up (HousingWire)

Multifamily REITs reported solid 3Q demand but soft pricing – Earnings calls show resilient absorption, high retention and strong Northern California performance, while Sun Belt supply pressures and weaker rent growth pushed several REITs to trim full-year 2025 guidance (RealPage)

Typical retail worker earns $37K less than needed to rent a typical apartment - Median retail pay is about $34K versus the $71K income required for a $1,779 monthly rent, leaving workers more than 50% short although wages are now rising slightly faster than rents (Redfin)

Fannie and Freddie’s 2026 multifamily caps rise to $88B each – The FHFA lifted GSE capacity by $15B and kept the 50% affordability mandate while exempting workforce housing from the limits (ConnectCRE)

U.S. industrial rents rise 6% YoY – According to Yardi Matrix, a supply boom pushed vacancy to 9.6% in October as demand concentrated in sub-100K SF assets and Miami led rent growth with a 9% jump (TheRealDeal)

Warehouse sector rebalances in late 2025 – CNBC says slowing development, reshoring-driven demand and stabilized rents are bringing supply and demand back into alignment even as some oversupplied markets see slight rent declines (CNBC)

Insight: Vacancy rising to 9.6% is surprising given recent industrial optimism, yet rents are still up 6% YoY. The vacancy is mostly concentrated in big-box warehouses where a speculative wave of supply outpaced the immediate impact of reshoring demand. Conversely, pricing power is being driven entirely by sub-100K SF assets in last-mile infill locations, where zoning constraints continue to keep inventory tight. This divergence is validated by Ares and Makarora’s recent $2.1B agreement to acquire Plymouth Industrial REIT: they are specifically targeting hard-to-replicate, last-mile infill warehouses that are capturing outsized rent growth thanks to tailwinds including the continued e-commerce boom.

U.S. self storage softens in October – Yardi Matrix’s November report shows falling occupancy, flat rents and a 0.7% YoY decline in street rates as seasonal slowdown meets a cooling pipeline with under-construction supply dipping to 2.6% of inventory (MultiHousingNews)

Black Friday online sales hit a record $11.8B – Spending rose 9.1% YoY as shoppers shifted online amid higher prices, soft store traffic, and tariff concerns, with Cyber Monday projected at $14.2B (Reuters)

Updated malls that blend fresh tenants, immersive experiences and strong dining options are driving holiday traffic – Analysts say vibrant centers with curated brands, social spaces and year-round programming outperform as spending tops $1T for the first time (CoStar)

Retail REITs posted another strong quarter – Demand remains solid and new supply stays limited, creating a tight environment that continues to boost sector performance (CoStar)

Off-price apparel sees steady holiday traffic while traditional apparel hinges on sharp Black Friday spikes – Off-price shoppers linger longer and skew more value-oriented, while traditional apparel visits turn shorter and more last-minute in December (Placer.ai)

Southern California mall sales surge toward nine-figure deals – Investors are buying aging malls at discounted valuations and repositioning them into mixed-use community hubs as dense suburbs, limited new supply and evolving consumer demand drive a regional reinvention of physical retail (CommercialObserver)

Retailers push holiday sales earlier – Tariffs and a widening two-tier consumer economy drive heavier promotions that boost foot traffic but sharpen the divide between affluent and value-focused shoppers (CommercialObserver)

Hoffman & Associates and DeBartolo secure $144M construction financing for a mixed-use project in Richmond, VA – TD Bank provided the senior loan with equity from Red Cove Capital to fund the 400K SF Moore Street development with 366 apartments and 18K SF of retail (ConnectCRE)

Glendon Capital buys majority stake in 455K SF creative office campus Flight at Tustin Legacy in Tustin, CA at a ~$200M valuation – Alcion Ventures sold its position while Lincoln Property Company remains property and asset manager (TheRealDeal)

NYC faces rising affordable housing distress as costs surge – Advocates say the city needs $1B next year to prevent defaults since regulated rent growth trails insurance and operating expenses (Bloomberg)

NYC multifamily landlords Hungerford and Haruvi face foreclosure on $173.4M in loans – Lenders moved on two portfolios spanning 31 Manhattan buildings after a June maturity default tied to stalled refinancing amid family legal disputes (TheRealDeal)