The Brick Breakdown

💸 Inflation eases, but Fed stays cautious
March CPI came in below expectations, with headline inflation at 2.4% and core at 2.8%, renewing hopes for rate cuts later this year. Still, Fed officials remain cautious, warning that tariff-related volatility could disrupt the path forward and risk embedding inflation if not carefully managed.

🏢 Industrial and office markets show mixed signals
Office leasing is recovering in key metros like San Francisco and New York, but nationwide visits remain far below pre-pandemic levels. Meanwhile, industrial demand remains strong with cap rates compressing to 6.29%, even as New York’s industrial availability hits a 10-year high amid tariff-related uncertainty.

🏘️ Housing affordability gap widens as rates stay stubborn
Homebuyers now need over $50,000 more than renters to cover monthly payments, as high home prices and mortgage rates continue to stretch affordability. With rates holding near 6.9% and economic uncertainty slowing demand, the spring selling season is off to a muted start.

This Week in Real Estate: Key Events & Data

Quick Markets

30Y Mortgage: 6.92% (-8 bps)
10Y Treasury Yield: 4.45% (+17 bps)
FTSE NAREIT Index: 711.09 (-2.16%)
30-day SOFR Average: 4.34%

Market Pulse

Cooling inflation data has raised hopes for rate cuts, but Fed officials remain cautious as tariff uncertainty and global volatility threaten to reignite price pressures and delay policy easing

March CPI inflation slows to 2.4% – Core inflation at 2.8%, both below expectations, with monthly CPI down 0.1% (WSJ)

EU pauses retaliatory tariffs for 90 days – China hit with 145% tariff increase, deepening trade war concerns (NYT)

Fed's Goolsbee signals rate cuts could happen if economy stabilizes – Emphasizes a wait-and-see approach due to high uncertainty from tariffs and global market volatility (Reuters)

Fed's Logan warns against permanent tariff-induced inflation – Emphasizes the need to manage inflation expectations to prevent a cycle like the 1970s and 1980s (Bloomberg)

Policy & Industry Shifts

Zillow tightens rules on listings – New policy requires agents to post homes to MLS within 24 hours or be banned from Zillow, escalating tension with Compass over private listings (Bloomberg)

Residential

Affordability gaps continue to widen as homebuyers now need over $50,000 more than renters to cover monthly payments, with stubbornly high mortgage rates and economic uncertainty dampening spring buying activity

Homebuyers need $50K+ more than renters to afford monthly payments – The gap is widening due to rising home prices and mortgage rates (Redfin)

Stubborn mortgage rates impact home-selling season – Mortgage rates hold steady, while tariff turmoil and economic uncertainty slow homebuying demand (WSJ)

Office

Office demand is gradually rebounding in key markets, but persistently low foot traffic and high vacancy rates suggest the broader sector is still struggling to regain pre-pandemic momentum

Office visits up in March 2025 – New York and Miami lead recovery, with YoY visits up in 10 of 11 cities, but nationwide visits are still down 32.2% from pre-pandemic levelscities (Placer.ai)

San Francisco leasing surged in Q1 2025 – 2.8M SF leased, with vacancy rising to 30.6%, sublease availability down 8.2%, and rents rising, especially for Class B assets (Colliers)

Industrial

Investor appetite for industrial assets remains strong, but rising vacancies in markets like New York and tariff-driven volatility in container rates point to growing pressure on fundamentals

Industrial cap rates compress further – Average rate drops to 6.29% as assets continue to see strong demand from investors , down 13 basis points YoY (GlobeSt)

New York’s industrial availability hits 10-year high – Rising vacancies due to new construction and tariff uncertainty push availability rate to 10.2% by Q1 2025 (CommercialObserver)

Container rates surge amid tariff shock – U.S.-China tariffs trigger short-term boost, but demand expected to drop, leading to a possible decline in rates (FreightWaves)

Market Mix

Hotel loyalty programs surged 14.5% in 2024 – Members contributed 52.8% of occupancy, but each stayed less often, posing challenges in converting infrequent travelers (CBRE)

Financings

Data center company TierPoint raises $500M for data center growth – Bond offering supported by revenue from 33 properties to fuel expansion (CoStar)

Terra and Turnberry secure $392M construction loan from Tyko Capital for Miami Beach convention hotel – 800-room, 17-story hotel near Miami Beach Convention Center set for completion by 2027 (TheRealDeal)

Smith Hill Capital, Bain Capital provide $235M refi for Gurney’s Montauk, New York Resort – Secures financing after exiting special servicing, with a $281M appraisal (CommercialObserver)

G.H. Palmer Associates secures $168M refinancing from Freddie Mac for Santa Clarita, California apartments – Loan supports 776-unit community, with planned renovations (REBusinessOnline)

M&A

Building & Portfolio M&A

Blackstone buys Texas warehouse portfolio for $718M – Deal adds 6M SF across 25 properties in Dallas and Houston, betting on continued demand despite trade tensions (Bloomberg)

Terra and Fortune International pay record $205M for Miami Key Biscayne site – Developers plan 56-unit luxury condo on former Silver Sands Beach Resort property (TheRealDeal)

LinkedIn buys 120,000 SF Sunnyvale, California R&D building for $75M – Expands office footprint next to its headquarters on Maude Avenue (BizJournals)

Copart buys 40-acre Palm Beach, Florida auto yard for $65M – Salvaged car auction firm increases its presence South Florida (TheRealDeal)

Geis Cos. sells The Centro in Fort Myers, Florida, for $56.7 million – Continental Properties acquires the 264-unit multifamily building, which opened in late 2023 (CoStar)

Distress Watch

Destiny USA, NY's largest mall, defaults on $300M loan – Pyramid Management faces foreclosure risk as it negotiates loan extension (Bisnow)

Foreclosures up 11% in Q1 2025 – 93,953 properties filed, with increases in starts and repossessions, though levels remain below historical averages (MortgageOrb)

Proptech & Innovation

AI-powered agent platform Alpha7x promises to revolutionize mortgage operations – Automates key tasks, boosts productivity by 7x, cuts costs up to 60%, and integrates with existing systems (HousingWire)