Hello Brick Brief readers, 

Thank you for your continued support! Today we’re seeing private sector hiring rebound, Prologis signal an industrial bottom, and retail demand hold firm as value-focused spending drives growth.

💼 Private Sector Hiring Rebounds
The U.S. private sector added 42K jobs in October as hiring resumed after two months of declines, led by trade, transportation, and utilities. Stronger employment data pushed 10-year Treasury yields up to 4.15% as traders scaled back rate cut expectations, with markets now pricing in a 62.5% chance of a 25 bps reduction in December.

🏭 Prologis Signals Industrial Bottoming
Prologis believes industrial real estate has reached the bottom of the cycle as leasing momentum and utilization rates rise. The firm reported 47M SF of net absorption in Q3, a 64% QoQ increase, and utilization climbing to 84.7% in October, signaling renewed tenant demand and stability heading into 2026.

🛒 Retail Demand and Value Spending Strengthen
Retail fundamentals strengthened in Q3 as U.S. retail sales reached $16.1B and availability dropped to a record-low 5.3%. Value grocers like Grocery Outlet and WinCo saw traffic rise 10.2% and 5.1% YoY, while McDonald’s said consumers across all income levels remain laser-focused on getting fair value for their dollar.

30Y Mortgage: 6.37% (+4 bps)

10Y Treasury Yield: 4.15% (+7 bps) 

WSJ Prime Rate: 7.25%

FTSE NAREIT Index: 760.18 

30-day SOFR Average: 4.20%

US private sector added 42K jobs in October – ADP data showed hiring resumed after two months of losses, led by trade, transportation, and utilities (FT)

US services activity hits 8-month high in October – ISM nonmanufacturing PMI rose to 52.4 as new orders strengthened, but employment contracted for a fifth straight month amid tariff uncertainty and a record government shutdown (Reuters)

US companies cut over 100K jobs in 2025 – Firms including UPS, IBM, Amazon, and GM led widespread layoffs as businesses tighten costs and restructure amid economic uncertainty and tariff-driven headwinds (Reuters)

Fed’s Miran calls for another rate cut in December – The governor said current policy is too restrictive and risks slowing the economy, citing softer labor conditions and uncertainty from Trump’s tariff regime (Reuters)

U.S. CRE investment volume rose 13% YoY to $112B in Q3 – Private investors led with $68B as institutional buyers followed with $23B (CBRE)

Lending conditions improved as CBRE’s Lending Momentum Index rose 0.55 points YoY – Alternative lenders accounted for 37% of Q3 loan closings, ahead of banks and life companies (CBRE)

VA loans rise to 7.3% of mortgaged home sales – Military members and veterans are using VA loans at the highest August share since 2019 as buyers gain leverage in a slower market (Realtor.com)

U.S. apartment rents fell 0.7% YoY in October – The third straight monthly decline came as occupancy slipped to 94.9%, with South and West markets weakening while tech hubs like San Francisco and New York saw renewed rent growth (RealPage)

U.S. flexible office inventory grows 11% YoY – The sector now accounts for 2.6% of national office space as companies adopt “coworking-first” strategies and expand in Sun Belt and tertiary markets like Miami and San Diego to support hybrid work demand (CommercialObserver)

Insight: Flexible office growth is strongest in tertiary markets because companies are turning to coworking providers to open smaller satellite offices closer to where employees live. These spaces let firms support collaboration and culture while avoiding long commutes and costly

AI startup Sierra plans 300K-SF office lease at 185 Berry St. in San Francisco, CA – The Bret Taylor–led firm’s deal at the China Basin complex would mark its third SF lease in three years amid surging AI sector expansion (Bisnow)

Robinhood signs 125K-SF sublease at Penn 2 office tower in New York, NY with Vornado – The 10-year deal for floors 25–26 was leased from Madison Square Garden as Penn District leasing momentum accelerates (TheRealDeal)

Fintech firm Current signs 62K-SF office lease at Penn 2 in New York, NY with Vornado – The 10-year deal on the 23rd floor follows the company’s relocation from Chelsea and brings the redeveloped tower to 78% leased (TheRealDeal)

Pembroke secures 25K SF of new office leases at 1201 New York Avenue NW in Washington, D.C. – The deals with Aluminum Association, CLIA, and ITG Brands bring the 13-story tower to 94% leased amid 22% citywide vacancy (CommercialObserver)

Industrial REIT Prologis believes industrial fundamentals have reached the bottom of the cycle, supported by rising leasing momentum, higher utilization, and renewed tenant demand heading into 2026.

Logistics real estate demand rises 64% QoQ to 47M SF net absorption in Q3 – Prologis reports improved leasing and absorption as larger tenants resume long-term commitments despite muted consumer spending (Prologis)

Utilization climbs to 84.7% in October as supply chain activity stabilizes – Manufacturers and wholesalers lead gains after front-loading freight earlier in 2025 amid trade volatility (Prologis)

Speculative development remains subdued with vacancy near 7% – Developers show discipline as scarcity emerges in select markets and rents approach the bottom of the cycle (Prologis)

U.S. freight volumes fall 2.9% in Q3 while shipper spending rises 2% – The U.S. Bank Freight Payment Index shows shippers paying more to move less freight as tariffs, weak manufacturing, and slowing consumer demand weigh on the market (FreightWaves)

U.S. retail rebounds in Q3 with $16.1B in sales – Availability fell to a record-low 5.3% as Sun Belt markets led leasing gains and investment volume jumped 40% YoY (CommercialObserver)

Grocery Outlet Bargain Market traffic up 10.2% YoY in Q3 2025 – The West Coast-based value grocer continues expanding nationwide as consumers adapt to persistent food inflation and seek lower prices (Placer.ai)

WinCo Foods traffic up 5.1% YoY in Q3 2025 – The employee-owned discount chain is gaining ground in new regions as shoppers increasingly shift from traditional supermarkets to value-driven formats (Placer.ai)

Deutsche Bank explores hedges for data center loan exposure – The bank has lent billions to AI infrastructure developers and is weighing options like shorting AI stocks or using synthetic risk transfers to mitigate downside risk (FT)

Airline bookings drop as U.S. shutdown hits day 36 – Major carriers report weaker demand ahead of Thanksgiving as unpaid air traffic controllers and TSA staff cause widespread delays (Reuters)

McDonald’s missed both Q3 earnings and revenue expectations but posted 3.6% same-store sales growth driven by its value menu. CEO Chris Kempczinski said the company continues to see a bifurcated consumer base, with quick-service traffic from lower-income consumers declining nearly double digits in the third quarter, a trend that has persisted for almost two years. In contrast, traffic among higher-income consumers remains strong, increasing nearly double digits in the same period. McDonald’s emphasized that value remains important across all income levels, as consumers want to feel they are getting good value for their dollar.

Insight: The last sentence is especially important. Restaurants like Chipotle are losing customers as shrinking portions and rising prices make diners feel like they’re being ripped off. McDonald’s faced this same issue last year same-store sales were declining and customers complained that a Big Mac meal topping $10 no longer felt affordable, which prompted a strategic pivot back toward value. 

Dezer Development secures $630M construction loan for Bentley Residences condo tower in Sunny Isles Beach, FL – Madison Realty Capital provided financing for the 61-story, 216-unit luxury project (CommercialObserver)

Terra secures $238M refinancing for The Well mixed-use project in Bay Harbor Islands, FL – Eldridge Capital and Hudson Bay provided financing for the 80% pre-leased 66-unit condo and 102K-SF office development (CommercialObserver)

Prime Group and Shaner Hotel Group secure $54M refinancing for Faro Blanco Resort & Yacht Club in Marathon, FL – Peachtree Group provided a three-year bridge loan for the 126-key Hilton Curio property following a 2024 renovation (CommercialObserver)

$30B AUM real estate investment firm Kennedy Wilson received a $1.5B take-private offer – The move follows its expansion in multifamily through the Toll Brothers Apartment Living acquisition (Bisnow)

Koch Real Estate invests $165M to boost its stake in Amherst Group – The deal makes Koch the largest outside investor as Amherst expands its single-family rental platform and acquisition capacity (Bloomberg)

David Tabak acquires 563 Sackett St development site in Brooklyn, NY for $58.5M from the Mazzei family – The 38.5K-SF Gowanus property allows 258.6K buildable SF for a planned 12-story, 350-unit residential project (CommercialObserver)

Flagship Communities REIT acquires manufactured housing assets in Indiana and Ohio for $79M – The $45M Seymour community and $34M Cincinnati-area portfolio add 1,240 lots and are funded through a $70M unsecured term loan (ConnectCRE)

Stockdale Capital Partners acquires 266-unit multifamily property The Quincy at Kierland in Scottsdale, AZ for $110.3M from Embrey – The asset sold for $414K per unit in an all-cash deal and is 94.4% occupied (ConnectCRE)

Lincoln Property and Artemis Real Estate Partners acquire 250K-SF industrial facility in Orange, CA for $65M from Paper Mart – The JV purchased the company’s headquarters at 2164 N. Batavia St. in a sale-leaseback and plans upgrades before re-leasing (TheRealDeal)

Cerberus seeks $3B for new opportunistic real estate fund – The vehicle targets a 13–16% IRR and will focus on data centers, housing-short metro areas, and non-performing loans (Bloomberg)

Matt Ferrari launches PXV to target $2B in value-add multifamily acquisitions – The firm will focus on institutional-quality assets across the U.S (IREI)