Key Insights

Tariffs are creating economic uncertainty for the industrial sector, with FedEx missing earnings expectations as cautious industrial customers pulled back on shipping demand. However, Philadelphia’s regional manufacturing data showed that conditions are not as bad as feared, as activity remained positive and employment hit a multi-year high despite declines in new orders and shipments, while jobless claims remained relatively stable at 223,000.

Data infrastructure continues to show strength as institutional capital flows into high-demand sectors. STACK Infrastructure secured $4 billion in green financing to expand its data center footprint, while institutional investors are increasing allocations to private real estate, reinforcing confidence in digital assets.

The retail sector is experiencing a shift, with weakness in apparel and specialty stores leading to 140 million square feet of closures, while demand for service-based retail like food, fitness, and healthcare remains strong. Private equity interest in 7-Eleven and Circle K’s planned divestiture of 2,000 U.S. stores highlights investor appetite for resilient, necessity-driven retail assets amid ongoing sector realignment.

This Week in Real Estate: Key Events & Data

Quick Markets

30Y Mortgage: 6.71% (-5 bps)
10Y Treasury Yield: 4.25%
FTSE NAREIT Index: 778.48 (-0.18%)
30-day SOFR Average: 4.34%

Market Pulse

Despite political pressure for rate cuts, the Fed is likely to wait until June as inflation risks persist, while stable jobless claims and stronger-than-expected Philadelphia manufacturing data suggest the economy remains resilient despite trade tensions and slowing hiring

Trump urges Fed to cut rates – Calls for lower rates to support tariffs, but markets expect the Fed to wait until June amid inflation risks (CNBC)

Jobless claims slightly rise to 223K – Labor market stable but hiring slows amid trade tensions and government cuts (Reuters)

Philadelphia regional manufacturing slows but beats expectations – Activity remains positive despite declines in new orders and shipments, while employment hits a multiyear high (PhiladelphiaFed)

Policy & Industry Shifts

Government and regulatory shifts are reshaping real estate, with the GSA cutting leases despite some reversals, Florida considering property tax changes, the EPA easing construction rules, and FHFA leadership changes adding uncertainty to housing finance policy

DOGE reverses 135 lease terminations – 2.2M SF spared, but GSA still plans to cut 657 leases totaling 8M SF (Bisnow)

Florida Considers Property Tax Repeal – Lawmakers explore eliminating or reducing property taxes amid soaring home costs, sparking revenue concerns (WSJ)

EPA to revise WOTUS rule – Administrator Zeldin aims to streamline regulations and lower construction permitting costs while protecting navigable waters (EPA)

Freddie Mac CEO Fired in FHFA Shake-Up – FHFA Director Bill Pulte removed Freddie Mac CEO Diana Reid as part of a broader leadership overhaul (Bisnow)

Residential

Despite a rebound in existing-home sales, near-record housing costs and rising mortgage rates continue to stall pending sales, while new tariffs on construction materials threaten to push development costs even higher.

US Existing-Home Sales Rebound in February – Sales rose 4.2% to an annualized 4.26M as improved weather and higher inventory boosted activity, though affordability remains a challenge (Bloomberg)

Near-record housing costs stall pending sales – Monthly payments near all-time highs at $2,793, keeping pending sales down 5.2% despite rising home tours and mortgage applications (Redfin)

Tariffs Could Drive Up Housing Costs – Higher tariffs on construction materials from Mexico, Canada, and China may raise development costs by 3-5% (CBRE)

Commercial and multifamily mortgage debt rises – Outstanding debt hit $4.79T in Q4 2024, up 3.7% YoY, with multifamily debt growing 5.4% to $2.16T (MBA)

US Mortgage Rates Rise for Second Week – The 30-year fixed rate increased to 6.67%, keeping borrowing costs elevated despite expectations for Fed rate cuts later this year (Bloomberg)

Market Mix

Shifting consumer preferences are driving demand for service-based retail, while widespread closures in the apparel and specialty sectors are freeing up space, potentially alleviating retail real estate tightness

Service-based retail to outpace goods-based leases – Food, fitness, and healthcare tenants drive demand, while 140M SF from discount, apparel, and specialty store closures may ease tight availability (GlobeSt)

Earnings

FedEx’s earnings miss and lowered forecast highlight growing industrial uncertainty as tariffs disrupt supply chains and weaken demand, adding pressure to a weakening economic outlook 

FedEx missed Q3 earnings expectations and lowered its FY profit and revenue forecast due to stubbornly soft demand and uncertainty in the US industrial economy thanks to tariffs (Reuters)

Financings

Data centers continue to attract strong investment, with STACK Infrastructure securing $4 billion in green financing to expand its footprint, reflecting sustained demand for digital infrastructure amid rising energy and connectivity needs

$4B Data Center Green Financing – Data Center developer STACK Infrastructure secured $4B in green financing to expand its data center infrastructure in Virginia, Oregon, and Canada (IREI) 

$206M Hialeah, FL Multifamily Construction Loan – Baron Property Group secured financing from Post Road Group for a 661-unit project, set for completion in late 2027 (TheRealDeal)

$80M Fort Lauderdale Multifamily Construction Loan – Affiliated Development secured financing from BMO Bank for a 400-unit project (CommercialObserver)

$55M Chicago Suburb Construction Loan – VennPoint secured $55M from Bank OZK and an insurance firm for a 144-unit built-to-rent project in Deerfield, IL (TheRealDeal)

M&A

Private equity interest in retail remains strong as 7-Eleven and Circle K owners seek buyers for 2,000 stores, highlighting continued demand for essential retail assets amid consolidation pressures

7-Eleven and Circle K Owners Plan 2,000 US Store Divestment – Seven & i and Couche-Tard seek PE buyers for their convenience stores to address antitrust concerns in their $47B merger bid (FT)

Chanel Eyes $450M Buy at 655 Madison, NYC – The luxury brand is in talks to acquire 65K sq. ft. of retail space in Extell’s planned tower (CommercialObserver)

$69M Brooklyn Multifamily Deal – Shel Capital and Bluestone bought a 105-unit Gowanus building at a $12.7M discount from 2018 (CommercialObserver)

$60M Oracle Nashville Land Buy – Oracle acquired 3.7 acres from GBT Realty near its planned $1.35B East Bank HQ, strengthening its commitment to the area (TheRealDeal)

Shopoff Realty Buys $60M Buena Park, CA Site – The firm and Lennar Homes plan to convert the 13.75-acre Amway property into for-sale townhomes (CommercialObserver)

Institutional Fundraising

$1B affordable housing fund – SDS Capital seeks to provide below-market financing to develop and preserve affordable units nationwide (MultiHousingNews)

Institutional investors boost private real estate – Allocations rise to 37% amid demand for data centers and energy infrastructure (GlobeSt)