Hello Brick Brief readers, 

Good morning. Today we’re seeing Lowe’s making aggressive moves to catch up to Home Depot, big construction projects being deferred, and the data center boom continuing!

🛠️ Lowe’s Plays Catch-Up on the Pro Front

Lowe’s is now scrambling to close the gap with Home Depot, announcing its $8.8B acquisition of Foundation Building Materials after years of trailing in the pro contractor segment. These pros focus on essential repairs that cannot be delayed, which has helped Home Depot grow pro sales to 55% of revenue following its $18.3B SRS and $4.3B GMS acquisitions.

🏚️ Big Projects Get Deferred First

Building materials company James Hardie’s shares plunged 34% after a sharp profit drop and revised guidance tied to weaker demand for discretionary home upgrades. The company’s exposure to large-ticket projects like siding has made it a bellwether for housing uncertainty, with volumes falling across key Sunbelt markets as contractors face fewer big jobs.

📡 Data Centers Soak Up Capital and Demand

Vantage Data Centers is reportedly finalizing a record $22B loan for a Texas campus backed by JPMorgan and MUFG, showing how investor appetite for AI infrastructure remains strong. With national vacancy near 0% and 73% of the 8 GW pipeline already preleased, rent growth is expected to continue as Dallas and Northern Virginia lead absorption.

30Y Mortgage: 6.61% (+1 bps) 

10Y Treasury Yield: 4.29% (-2 bps)

WSJ Prime Rate: 7.50%

FTSE NAREIT Index: 767.25 (+0.32%) 

30-day SOFR Average: 4.35%

Fed minutes show broad support for July rate hold – 16 officials backed steady rates at 4.25–4.5% while Bowman and Waller dissented for a cut amid tariff-driven inflation risks (WSJ)

Trump calls for Fed Governor Lisa Cook to resign over mortgage fraud – Allegations center on disputed owner-occupancy loans, which Cook denies (Bloomberg)

Global materials company James Hardie’s stock fell 34% in its worst day since 1973 after management warned that demand for repairs and new construction in North America remains weak. CEO Aaron Erter said “uncertainty is a common thread” in conversations with contractor customers.

• Hardie sells primarily through builders and pros, with about 70% of revenue tied to North America. Its products are concentrated in discretionary, big-ticket projects like siding and exterior cladding that homeowners can easily defer when affordability is strained.
• The pullback shows how quickly discretionary remodeling dries up. Contractors are seeing fewer large-scale jobs, and Hardie’s volumes in key states like Texas, Florida, and Georgia have weakened sharply.
• Home Depot, by contrast, has a diversified pro mix that captures steady, non-deferrable spending. Pros still buy for repairs, replacements, and maintenance that cannot wait, which has helped support sales even as homeowners delay larger projects.
• Home Depot expanded its pro distribution network with an $18.3B purchase of SRS in March 2024 and a $4.3B deal for GMS in June 2025. In its recent Q2 earnings report, Home Depot reported that revenue from pros now make up 55% of total sales.

 • Lowe’s is now moving aggressively to catch up to Home Depot, announcing an $8.8B acquisition of Foundation Building Materials today. The deal highlights how both retailers are doubling down on contractors even as Hardie’s results reveal mounting pressure in the pro channel.

Takeaway: James Hardie’s collapse shows the limits of pro demand when exposure is concentrated in discretionary, big-ticket projects. Home Depot’s diversified pro mix has held up better, while Lowe’s is racing to catch up with its Foundation deal just as uncertainty weighs on contractors.

Markets are stabilizing around lower mortgage rates and a softer labor outlook, but affordability challenges and regional supply shifts are driving deeper splits between single-family and multifamily, and between high-end and workforce rentals

Mortgage rates steady near 10-month lows – Markets look past July Fed minutes as weak jobs data shift conditions, with 27.4% of listings seeing price cuts and 27 metros now in neutral or buyer’s territory (Zillow)

Housing split in H1 2025 – Single-family permits fall 5.6% while multifamily rises 2.9%, with Southern and Midwestern metros leading gains (GlobeSt)

Immigration shapes rental dynamics – Workforce housing sees steady demand from new arrivals while high-end assets face lease-up risk amid supply glut and labor cost pressures (GlobeSt)

Coastal multifamily markets regain investor focus – Investors target resilient coastal metros like San Francisco and Seattle despite national volatility (IREI)

Downtowns overloaded with office – Cushman & Wakefield says rebalancing space toward housing and retail could unlock $340B in value, with Boston and San Francisco among the most exposed (CommercialObserver)

Amenities shift from perks to essentials – Integrated services like fitness, childcare, wellness and retail now drive leasing demand, tenant retention and rental premiums (JLL)

Prologis renews and expands to 23K SF at 461 Fifth Avenue in New York, NY – Industrial REIT grows Midtown office footprint in SL Green-owned tower near Bryant Park (CommercialObserver)

Consulate General of India leases 21K SF at Aon Center in Los Angeles, CA – First LA consulate takes full floor at Carolwood’s tower (Bisnow)

Industrial demand remains resilient in select regions and tenant segments, but rising vacancy and shifting port flows signal a more uneven, supply-heavy market ahead

U.S. industrial vacancy climbs to 7.3% – Highest since 2013 as sublease space surpasses 200M SF, up 26% YoY (Colliers).
Port volumes decline in Q2 – West Coast imports fall while East Coast gains, as tariffs disrupt flows and fuel uneven utilization (Colliers)

Bulk industrial leasing hits 177M SF in H1 2025 – Activity up 17.5% YoY led by 3PL tenants, with Southeast growth surging 78% (GlobeSt)

CRE sales up 16% through mid-2025 – Green Street forecasts strong second half as investment activity accelerates (IREI)

DICK’S, Academy and Lululemon offset Q2 traffic declines – DICK’S visits fell 5.3% but average spend rose 3.7%, Academy overall traffic slipped 0.9% despite a 5.1% same-store drop, and Lululemon comps eased 2% on digital growth (Placer.ai)

Data center vacancy nears 0% – 8 GW pipeline is 73% preleased, keeping vacancy below 5% through 2027 and fueling rent growth (JLL)

Northern Virginia and Dallas lead absorption – Together with Chicago, Austin/San Antonio, and Atlanta they captured most of H1’s demand as capital keeps flowing into the sector (JLL)

Lowe’s beat Q2 earnings but slightly missed on revenue, as homeowners favored smaller DIY projects while deferring big-ticket renovations, leaving the outlook cautious until borrowing costs ease (CNBC)

Building materials company James Hardie's shares fell 34% in its worst day since 1973 after reporting a 29% YoY profit drop and cutting guidance. Management flagged weak North American demand as homeowners defer remodeling projects and single-family construction slows, pressuring volumes across key markets (Bloomberg)

JPMorgan and MUFG in talks on $22B Texas data center loan – Financing would back Vantage Data Centers’ campus with $3B equity from Silver Lake and DigitalBridge (Reuters)

U.S. Bank provides $66M construction loan for 338-unit apartment complex in Margate, FL – Trammell Crow and Rez Se Land secured financing for the Alexan-branded project on South State Road 7 (TheRealDeal)

Obra Real Estate provides $52M acquisition loan for Lakeside & Flagler Center Business Park in Jacksonville, FL – Savlan Capital acquires seven-building, 765K-SF office and flex portfolio from TD Bank Group, 57% occupied (CommercialObserver)

BDT & MSD Partners provides $340M refi for One Flagler in West Palm Beach, FL – Stephen Ross’ Related Ross completed the 270K-SF office tower this year (CommercialObserver)

PGIM provides $66M refi for Piazza Carmel retail center in San Diego, CA – Baldwin & Sons secured fixed-rate loan for grocery-anchored Class A property in Carmel Valley (CommercialObserver)

Lowe’s to acquire Foundation Building Materials for $8.8B – The deal expands its pro-focused building materials distribution platform across 370 North American locations (WSJ)

DC landlord Dave Schaeffer faces defaults as lenders seize $82M in Cogent shares – His 42-building office portfolio lost over $600M since 2022 with vacancy climbing to 35% amid weak demand for Class B space (Bloomberg)

Insight: Dave Schaeffer (like Franklin Street, a $171 million sunbelt-focused office REIT I wrote about a few weeks ago that is now exploring a sale) is another casualty of mid-tier offices falling out of favor. Extreme office bifurcation continues to leave everything but the highest quality assets behind.

Claire’s tween jewelry chain sold for $140M with up to 950 stores acquired – Ames Watson halts liquidation but 550–700 closures remain (CoStar)

Capitalize targets CRE refinancing surge – Startup connects brokers and lenders as looming maturities drive demand for data-driven deal sourcing (GlobeSt)